International Paper Co. (NYSE: IP – $43.72) posted third-quarter profits that topped expectations, but sales fell a bit shy of Wall Street’s forecasts. The Memphis, Tenn., paper company reported adjusted third-quarter earnings of $1.09 a share compared to $1.56 last year. Analysts on average, were expecting an adjusted profit of $0.99 a share. Sales fell 5.6%, to $5.57 billion, missing Wall Street’s estimate of $5.61 billion. Gains in sales at the Industrial Packaging segment was offset by softness in the Global Cellular Fibers and Printing Paper units. In a statement issued by the company: “We continue to demonstrate the strength and resilience of our cash engine and our ability to perform well in a challenging global environment. Looking ahead to the fourth quarter, we will continue to maximize performance by optimizing our full value chain from fiber to the customer.”
The stock’s price has recovered some ground of late. But it continues to trade at a depressed valuation of ten times earnings, which enhances the stock’s 3- to 5-year recovery potential. Meanwhile, the solid 4.8% dividend yield should appeal to aggressive accounts with an eye on income.