Quarterly net sales were $5.5 billion in the first quarter of 2017 compared with $5.4 billion in the fourth quarter of 2016 and $5.1 billion in the first quarter of 2016. The year-over-year revenue increase was primarily due to the pulp business that was acquired in late 2016.
Business segment operating profits in the first quarter of 2017 were $428 million, compared with $464 million in the fourth quarter of 2016 and $497 million in the first quarter of 2016.
Cash provided by operations was $633 million in the first quarter of 2017 and $620 million in the first quarter of 2016. Free cash flow (non-GAAP) was $259 million for the first quarter of 2017 and $311 million in the first quarter of 2016.
"International Paper delivered a solid first quarter in the face of several challenges, including the digester incident at our Pensacola mill and higher input costs driven by a significant rise in OCC prices," says Mark Sutton, chairman/CEO. "Given the market fundamentals across most of our businesses in combination with several IP commercial and operational initiatives, we expect improved results pointing to a particularly strong second half as well as positive momentum entering 2018. I remain very confident in IP's ability to generate significant year-over-year earnings growth and continued strong cash flow in 2017."
The performance of the Company's business segments is measured quarter to quarter without variations caused by special items, as management focuses on business segment operating profits excluding those items (non-GAAP). The combination of IP's legacy pulp business with the acquired pulp business in 2016, will now be called Global Cellulose Fibers and reported as a separate business segment (previously reported in Printing Papers). Prior periods have been restated to reflect this change. First quarter 2017 business segment operating profits and business trends compared with the prior quarter are as follows:
Industrial Packaging operating profits in the first quarter of 2017 were $365 million ($360 million excluding special items) compared with $372 million ($379 million excluding special items) in the fourth quarter of 2016. In North America, sales price increase realizations for containerboard and boxes were more than offset by seasonally lower box demand, higher OCC costs and higher mill outage expenses, along with the impact from the Pensacola mill digester incident.
Global Cellulose Fibers operating profits in the first quarter of 2017 were a loss of $70 million (a loss of $51 million excluding special items) compared with a loss of $70 million (a loss of $32 million excluding special items) in the fourth quarter of 2016. Results for the quarter reflect $50 million in maintenance outage expenses, which include a major energy optimization project at the Port Wentworth mill. Operations and costs were impacted by the Pensacola mill digester incident and a delayed start up at Port Wentworth following its outage. The business is beginning to see benefits from announced price increases, along with synergies of $14 million in the quarter from the pulp business acquisition.
Printing Papers operating profits were $100 million in the first quarter of 2017 versus $121 million in the fourth quarter of 2016. Earnings in North America were impacted by higher input costs and maintenance outage expenses. Seasonally lower domestic sales volumes and an associated unfavorable mix led to lower earnings in Brazil. Operating profits in EMEA were higher due to lower maintenance outage expenses and lower operating costs, partially offset by seasonally lower sales volumes and higher wood costs in Russia.
Consumer Packaging operating profits were $33 million in the first quarter of 2017 compared with $41 million in the fourth quarter of 2016. The earnings decrease in North America reflects modestly lower sales prices and a less favorable mix, partially offset by seasonally higher volume and lower planned maintenance outage expense.