Paper and packaging firm International Paper Company IP reported relatively modest first-quarter 2016 results with operating earnings (excluding one-time items) of $330 million or 80 cents per share declining from $357 million or 84 cents per share in the year-ago quarter. Although operating earnings declined year over year due to lower revenues, it comprehensively beat the Zacks Consensus Estimate of 69 cents.GAAP earnings for the quarter were $334 million or 81 cents per share compared with $313 million or 74 cents per share in the year-ago quarter. The year-over-year increase in GAAP earnings, despite lower revenues, was largely attributable to lower operating expenses and lower income tax provision for the quarter.Net sales for the quarter were $5,110 million, down from $5,517 million in the year-ago quarter but ahead of the Zacks Consensus Estimate of $5,096 million. The year-over-year decline in revenues was primarily due to the sale of the IP-Sun joint venture in fourth-quarter 2015. Total operating profit in the reported quarter was $497 million compared with $623 million in the first quarter of 2015.Segment PerformanceIndustrial Packaging: Sales from this segment declined to $3,452 million from $3,553 million in the year-ago period. In North America, box shipments were down due to seasonally patterns. The segment was also impacted by higher planned maintenance outage expenses. However, lower average sales prices for boxes and domestic containerboard were more than offset by favorable input costs for recycled fiber and freight. Operating income came in at $396 million versus $468 million in the year-ago quarter.Printing Papers: Sales from this segment were $1,184 million in the reported quarter versus $1,228 million in the year-earlier quarter. Operating income for the segment was $85 million versus $109 million in the year-ago quarter. Lower maintenance outage costs benefited operations in North America, while the pulp business was affected by lower pricing and higher outage expenses. In Brazil, seasonally weak demand patterns were partially offset by increased sales prices. Consumer Packaging: Sales from this segment decreased 36.4% year over year to $495 million in the reported quarter. Operating profit was $16 million versus $46 million in the year-ago quarter. In North America, segment sales were affected by higher planned maintenance outage costs and lower volume.Balance Sheet Cash and temporary investments aggregated $1,155 million at quarter end, while long-term debt was $8,824 million. Cash flow from operating activities was $620 million compared with $638 million in the prior-year period. Free cash flow at quarter end was $311 million compared with $319 million in the prior-year period.International Paper recorded equity earnings of $62 million from its Ilim joint venture in the quarter compared with $34 million in the prior quarter. The company recognized non-cash after-tax foreign exchange gain of $11 million in the quarter.OthersDuring the quarter, International Paper inked a definitive agreement to divest its corrugated packaging business in China and Southeast Asia. The transaction is likely to be completed in the next couple of months, subject to the fulfilment of the mandatory closing conditions and regulatory approvals.The assets will be sold to Xiamen Bridge Hexing Equity Investment Partnership Enterprise, which specializes in packaging and related industries, for approximately RMB 1 billion (approximately $150 million). The held-for-sale asset portfolio includes 18 manufacturing plants involving employee strength of roughly 3,000.Moving ForwardWith strong performances in the North American Industrial Packaging business and paper business around the globe, International Paper continues to focus on improving its free cash flow for higher return on capital and higher cash return to its shareholders.International Paper currently has a Zacks Rank #3 (Hold). Some better-ranked stocks include Fibria Celulose S.A. FBR, PH Glatfelter Co. GLT and Sealed Air Corporation SEE, each sporting a Zacks Rank #1 (Strong Buy).Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SEALED AIR CORP (SEE): Free Stock Analysis Report INTL PAPER (IP): Free Stock Analysis Report FIBRIA CELULOSE (FBR): Free Stock Analysis Report GLATFELTER (GLT): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research