International Paper Co. on Thursday reported a 40 percent drop in second-quarter profit but said the worst of the global economic slowdown appears to be over and that demand is steadying.

The top producer of cardboard box parts in North America said its net income totaled $136 million, or 32 cents per share, reflecting slightly lower sales and a slew of one-time charges. In the same period last year, IP earned $227 million, or 54 cents per share.

The latest results included restructuring charges from mill closures and reorganizations that totaled $244 million, as well as a big gain of $294 million from a federal credit for using alternative energy sources.

Quarterly sales edged down to $5.8 billion from $5.81 billion

“When we look at global economic conditions today, it appears the worst is behind us,” said CEO John Faraci. “We have not seen any signs of sustainable progress in North America, but it appears demand has stabilized at lower levels.”

He noted improvement in Latin American paper markets and solid packaging demand growth in China. Inventories are also lean for both paper and cardboard box material.

Before special items, the Nashville, Tenn.-based company earned $86 million, or 20 cents per share. compared with Wall Street expectations of break-even profit on sales of $5.75 billion.

In premarket trading, shares of the Nashville, Tenn.-based company rose 71 cents, or 3.9 percent, to $19.10.

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