In addition, the company's land sales slowed due to the economic downturn. IP reported $2 million in operating profits for forest products, down from $38 million in the fourth quarter of 2008.
The company's previously announced sale of 143,000 acres is expected to close by the end of the third quarter, subject to the buyer's receipt of financing.
At the end of the quarter, International Paper had $3.5 billion in cash and committed facilities. During the quarter, the company recorded $666 million of free cash flow and repaid $550 million of debt.
"Six months into the weakest economic environment we've seen in decades, we continue to execute well," Faraci said. "During the quarter, we also benefited from lower input costs, the realization of integration synergies and reduced overhead spending."