International Paper announced its Q3 2023 financial results, revealing a net sales decrease of approximately 14.5% compared to the same quarter in 2022, totaling $4,613 million. Net earnings for Q3 2023 were $165 million, a significant 82.6% decline from the previous year's $951 million.
In terms of business segment performance, the operating profit for Q3 2023 was $352 million, representing a 24.1% decrease from Q3 2022. Adjusted operating earnings for the same period were $224 million, showing a 25.3% reduction. Cash provided by operations increased by 7.6% to $468 million in Q3 2023 compared to $435 million in Q3 2022. Free cash flow also saw a notable increase, reaching $240 million, a 21.3% rise from the $197 million reported in Q3 2022.
Operational highlights include the Industrial Packaging segment's operating profits of $325 million in Q3 2023, indicating a 6.6% increase from the previous quarter. Despite challenges such as lower sales prices and an unfavorable geographic mix in North America, the improvement was attributed to increased sales volumes, reduced planned outage costs, and favorable adjustments related to employee benefit costs. In the EMEA region, Industrial Packaging earnings were lower due to seasonally reduced volumes, an unfavorable product mix, and lower containerboard sales prices.
The Global Cellulose Fibers segment reported operating profits of $27 million in Q3 2023, slightly lower than the $30 million recorded in the second quarter. The decrease was primarily attributed to lower pulp pricing, offset by reductions in distribution, input, and operating costs, including favorable adjustments related to employee benefit costs. Despite lower pulp pricing, sales volumes improved, driven by a favorable market environment.
Mark Sutton, Chairman, and Chief Executive Officer of International Paper, expressed satisfaction with the results, highlighting the company's ability to surpass full-year targets for Building a Better IP initiatives. In response to challenges in the current macro environment, International Paper is strategically focusing on structural cost reductions, supply chain optimization, and investments in box capabilities to align with customer growth.
