Int'l Paper warns on 1Q

March 29, 2001: 11:47 a.m. ET

Paper maker sees profits of 5 cents a share, far below Wall Street forecasts

NEW YORK (CNNfn) - International Paper, the world's largest paper and forest products company, warned Thursday that first-quarter earnings will miss Wall Street forecasts due to weak business conditions and the news sent its stock tumbling.

The company blamed the expected shortfall on sharply higher energy costs at its mills and factories, which it said would be $50 million higher than in the fourth quarter. The company also said it expects to pay down its debt of $3.5 billion-to-$4 billion by the end of 2001.

The Stamford, Conn.-based paper maker forecast earnings for the latest quarter should be about 5 cents a share, compared with the consensus estimate of 15 cents per share by analysts polled by First Call.

"Nevertheless, the world economic environment is continuing to pressure our business even as we move into a seasonally stronger part of the year," said John Dillon, chairman and chief executive officer of International Paper.

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International Paper (IP: Research, Estimates) is the latest of many big U.S. companies whose earnings are taking a hit as the economy has slowed.

International Paper stock tumbled $1.43 to $34.79 at midday Thursday, a drop of nearly 4 percent. The stock has been trading between $45.93 and $26.31 in the past 52 weeks.