MEMPHIS, Tenn. (AP) – International Paper Inc. on Tuesday reported its second-quarter profit rose 49 percent as the company continued to turn its finances around through a yearlong restructuring plan.

The world’s largest paper maker also announced it has completed the sale of its coated paper business – which includes two mills in Maine – to CMP Holdings LLC, an affiliate of the investment firm Apollo Management, for nearly $1.4 billion.

International Paper reported quarterly profit rose to $115 million, or 24 cents per share, from $77 million, or 16 cents per share, in the year-ago period. Earnings from continuing operations, and before special items, rose to 41 cents per share from 31 cents last year.

Sales rose 7 percent to $6.27 billion from $5.86 billion in the year-ago period. Analysts, on average, projected earnings of 33 cents per share on sales of $5.8 billion, according to Thomson Financial.

“This is our best second quarter since 2005, and it’s the best quarter we’ve had in several years,” said Chairman and Chief Executive Officer John Faraci in a morning conference call.

Faraci said the solid quarter was driven by increasing price realizations, good volume and healthy operations in key platform businesses – photocopy-type paper and container board.

International Paper has initiated a restructuring plan to shed billions of dollars in assets by selling forestland and closing mills, using the proceeds to reduce debt and tighten financial operations.

Part of the restructuring plan has included a move from Stamford, Conn., to headquarters in Memphis, where the company held its first earnings conference call on Tuesday.

International Paper announced on July 13 a number of initiatives related to its plan. Among them is to buy back up to $3 billion of company stock, pay down a large chunk of debt, sell some forestland in Brazil for development by a third party and divest some other business units it doesn’t consider central to its new focus on photocopy-type paper and container board.

“Both of those businesses (photocopy-type paper and container board) are seeing better commodity prices as a result of capacity shuts that were taken last year,” said Steven P. Chercover, an analyst with Portland, Ore.-based D.A. Davidson & Co.

“They closed down inefficient or high-cost machines. So supply and demand is much tighter than a year ago.”

Chercover also said the company is starting to see results from raising the price of its uncoated paper.

“There have been several price increases the first half of this year,” he said. “They won’t get that on day one. It takes generally a couple of months for those price increases to hit the bottom line.”

International Paper officials said during the morning conference call that the company on Tuesday completed the sale of its coated paper business.

The deal includes the sale of paper mills in Jay and Bucksport, Maine, as well as two other mills in Michigan and Minnesota. The coated paper business generated $1.6 billion in sales for International Paper in 2005, the company said.

With about 6.5 million acres of land managed in the U.S. alone, International Paper is one of the world’s largest private landowners.

International Paper has operations in nearly 40 countries, employs nearly 68,700 people worldwide and exports its products to more than 120 nations.

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