IP earnings rise more than 5%

STAMFORD, Conn. – Forest products company International Paper Co., which has mills in Jay and Bucksport, Maine, said Friday earnings rose more than 5 percent for the first quarter as the company took in higher prices for its products in North America.

Net income rose to $77 million, or 16 cents per share, from $73 million, or 15 cents per share, a year earlier. Excluding charges related to estimated losses on businesses held for sale, a write-off of goodwill and debt retirement totaling 18 cents per share, International Paper earned 34 cents for the latest quarter. The year-ago net income excluding items was 12 cents per share.

The company also benefited from a lower tax rate in the latest quarter. The effective tax rate was 24 percent, compared with 33 percent in the 2004 period. The rate for the 2005 quarter reflects the favorable resolution of a tax matter that reduced the company’s tax provision by $19 million, or 4 cents per share.

Sales rose to $6.6 billion from $6.1 billion, marking the highest first-quarter level in four years. The company said the increase was mostly because of better pricing across its businesses in North America.

Forest products was the company’s best-performing segment, posting operating profit of $207 million, up from $176 million, as a result of stronger sales volumes and improved average prices for wood products.

Higher raw materials costs dampened results at the company’s printing papers divisions, while slowed production at certain mills resulted in a drop in operating income at the company’s consumer packaging business.