International Paper Co (IP) CEO Mark Sutton on Q1 2022 Results - Earnings Call Transcript

International Paper Co (NYSE:IP) Q1 2022 Earnings Conference Call April 28, 2022 10:00 AM ET

Company Participants

Guillermo Gutierrez - VP, IR

Mark Sutton - Chairman & CEO

Timothy Nicholls - SVP & CFO

Conference Call Participants

George Staphos - Bank of America Merrill Lynch

Anthony Pettinari - Citigroup

Adam Josephson - KeyBanc Capital Markets

John Dunigan - Jefferies

Mark Weintraub - Seaport Research Partners

Gabrial Hajde - Wells Fargo Securities

Mark Wilde - BMO Capital Markets

Kyle White - Deutsche Bank

Paul Quinn - RBC Capital Markets

Operator

Good morning, and thank you for standing by. Welcome to today's International Paper's First Quarter 2022 Earnings Call. [Operator Instructions] I would now like to turn today's conference over to Guillermo Gutierrez, Vice President, Investor Relations. You go ahead, sir.

Guillermo Gutierrez

Thank you, Charm. Good morning, and thank you for joining International Paper's First Quarter 2022 Earnings Call. Our speakers this morning are Mark Sutton, Chairman and Chief Executive Officer; and Tim Nicholls, Senior Vice President and Chief Financial Officer. There is important information at the beginning of our presentation on Slide 2, including certain legal disclaimers.

For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties. We will also present certain non-U.S. GAAP financial information. A reconciliation of those figures to U.S. GAAP financial measures is also available on our website. Our website also contains copies of our first quarter 2022 earnings press release and today's presentation slides. I will now turn the call over to Mark Sutton.

Mark Sutton

Thank you, Guillermo, and good morning, everyone. We'll begin our discussion on Slide 3. International Paper's first quarter earnings were better than we had outlooked, driven by strong price realization and solid operations to overcome significantly higher input costs, especially for energy, chemicals and distribution. We also delivered strong cash from operations.

We delivered strong year-over-year and sequential revenue growth in the first quarter, driven by price realization from prior increases in our 2 business segments. Omicron-related constraints impacted volume in our Packaging business in January. Our shipments recovered as expected throughout the quarter with demand normalizing at elevated levels as we enter into the second quarter. Our mills and converting system performed well as we managed through continued logistics constraints, which negatively impacted operating.

We executed our highest maintenance outage quarter of the year very well, and we expect to complete about 70% of our planned maintenance in the first half of the year. We achieved $40 million of earnings through our Building a Better IP initiatives, and we are confident in our full year target of $200 million to $225 million of gross incremental earnings in 2022.