MEMPHIS, Tenn. - Sylvamo (NYSE: SLVM), self-described as the world's paper company, announced its first quarter 2024 financial results, surpassing analyst revenue expectations and slightly exceeding EPS estimates.
The company reported earnings of $1.07 per share, which was $0.05 higher than the analyst consensus of $1.02. Revenue for the quarter was $905 million, notably higher than the consensus estimate of $851.03 million.
SLVM shares were down 1.9% in premarket trading.
The company's revenue showed resilience despite a decrease from the $941 million reported in the same quarter last year. The earnings report highlighted that the adjusted operating earnings were $45 million ($1.07 per diluted share) compared to $49 million ($1.16 per diluted share) in the previous quarter. Adjusted EBITDA stood at $118 million with a 13% margin, maintaining nearly the same level as the $117 million (12% margin) from the fourth quarter.
Chairman and Chief Executive Officer Jean-Michel Ribieras commented on the positive developments, noting the improvement in uncoated freesheet conditions and a strengthening order book which led to less economic downtime. Ribieras attributed the better than expected price and mix, along with stabilized input costs, as key factors contributing to the quarter's performance.
Looking ahead, Sylvamo provided guidance for the second quarter with an adjusted EBITDA forecast of $145 million to $160 million. This outlook is based on expectations of increased prices and mix, higher volumes due to stronger seasonal demand in Latin America, and improved operations and other costs. Input and transportation costs are anticipated to be stable or potentially improve by up to $5 million.
The company's strategic initiatives, such as Project Horizon, aim to achieve structural cost reductions and are on track to meet the targeted run rate savings of $110 million by the end of 2024. Sylvamo also reported share repurchases totaling $20 million this year, with $130 million remaining under its share repurchase authorization.
Sylvamo's financial position remains robust as it continues to reduce gross debt and maintain a strong balance sheet, allowing the company to invest in high-return capital projects exceeding $200 million. The board of directors declared a second quarter dividend of $0.30 per share, paid on April 29.
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