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IP issues 4Q warning
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December 20, 2000: 12:34 p.m. ET
World's No. 1 timber company says profit will likely fall 30% below estimates
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NEW YORK (CNNfn) - International Paper, the world's No. 1 paper maker, warned Wednesday that fourth-quarter earnings would probably miss Wall Street forecasts by about 30 percent because of the slowing economy and rising energy costs.
The Purchase, N.Y.-based company said based on current trends, it expects to post fourth-quarter earnings of about 30 cents a share, well shy of the average Wall Street estimate of 44 cents, as compiled by earnings tracker First Call Corp.
The company said its typical seasonal weakness during the quarter has been exacerbated this year due to the slowing U.S. economy and strong U.S. dollar, along with continued market-related downtime and rising energy costs.
 To help compensate for the slowing profit stream and counter rising energy costs, which are up $40 million compared to the third quarter, IP said it is shifting many of its plants to oil from gasoline. The company has also cut production of building materials to compensate for lower customer demand.
"We intend to keep production in line with demand, and are taking aggressive steps to respond to weakened market conditions," Chief Financial Officer John Faraci said. "We expected a seasonal slowdown in the quarter, but rising fuel costs and concerns about the economic outlook are impacting our business across the board."
The company also blamed pressure on prices for building materials and volume because of a seasonal slowdown, and has cut back production in that business as well.
IP (IP: Research, Estimates) shares fell 81 cents to $38.69 in trading Wednesday. 
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International Paper
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