International Paper Company stock research
FY2023 Q3
International Paper (IP) Gross Margin — Quarter Ended Sep 30, 2023
Gross margin for the current quarter weakened compared to both the prior quarter and the same quarter one year earlier. Revenue and cost of revenue decreased across both comparisons, with gross profit stable relative to the prior quarter but lower than the year-ago quarter.
Gross margin takeaway
Quarter ended Sep 30, 2023 · FY2023 Q3
Gross margin for the current quarter weakened compared to both the prior quarter and the same quarter one year earlier. Revenue and cost of revenue decreased across both comparisons, with gross profit stable relative to the prior quarter but lower than the year-ago quarter.
- The strongest observable margin driver is the slower decline in cost of revenue relative to the decline in revenue, which compressed the gross margin percentage.
- Compared to the prior quarter, revenue was slightly lower and cost of revenue also lower, but gross profit was unchanged, resulting in a slightly weakened gross margin. Compared to the same quarter a year ago, revenue, gross profit, and cost of revenue were all lower, with gross margin declining.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
27.5%
Gross profit
$1.3B
Revenue
$4.6B
Cost of revenue
$3.3B
Quarter-over-quarter change
-0.7 pts
Year-over-year change
-1.6 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2023 | $5.0B | $1.4B | $3.6B | 27.5% |
| Jun 30, 2023 | $4.7B | $1.3B | $3.4B | 28.2% |
| Sep 30, 2023 | $4.6B | $1.3B | $3.3B | 27.5% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2023
-0.7 pts
Year-over-year change
Sep 30, 2022
-1.6 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the slower decline in cost of revenue relative to the decline in revenue, which compressed the gross margin percentage.
Compared to the prior quarter, revenue was slightly lower and cost of revenue also lower, but gross profit was unchanged, resulting in a slightly weakened gross margin. Compared to the same quarter a year ago, revenue, gross profit, and cost of revenue were all lower, with gross margin declining.
Monitor the relative movement of cost of revenue versus revenue in upcoming quarters, as the current divergence contributed to margin compression.