Tim S. Nicholls
Senior Vice President and Chief Financial Officer at International Paper
Great. Thank you, Mark. Turning to our first quarter key financials on Slide five. As Mark mentioned earlier, our first quarter earnings were generally in line with our outlook and represent a trough based on seasonally low volumes, higher OCC costs and the majority impact from the 2023 sales price index declines. Operating earnings and margins were also negatively impacted by approximately $52 million or $0.10 per share from the January winter freeze and the Ixtac box plant fire. For the quarter, we generated $144 million of free cash flow.
As a reminder, our free cash flow in the first quarter of last year included a $193 million final settlement with the IRS related to IP's timber monetization structure. Looking ahead, we expect significant earnings improvement based on positive market trends and benefits from our commercial and cost improvement initiatives.
Now I'll turn to Slide six, and I'll provide more details about the quarter as we walk through the sequential earnings bridge. First quarter operating earnings per share was $0.17 as compared to $0.41 in quarter. As I mentioned earlier, the first quarter included $0.10 per share related to the January freeze and the Ixtac fire. Price and mix was higher by $0.14 per share, driven by significant margin and mix benefits from successfully executing our Box Go-to-Market strategy and our GCF optimization strategy. This was partially offset by the majority of prior sales price index declines from 2023.
Volume was unfavorable by $0.08 per share primarily due to seasonally lower shipments across both segments as well as some impact from the winter storm in January. We continue to deploy our commercial strategies across the portfolio, focused on margin and mix improvement which has impacted volumes in the near term as we transition based on our strategy. Operations and costs were unfavorable by $0.13 per share sequentially. This included approximately $0.07 per share from the January winter freeze and the Ixtac box plant fire.
The remainder was primarily due to cost inflation including the higher cost of employee benefits. The unfavorable impact to operating costs from seasonally lower volumes was offset by cost savings from our mill closure and machine shutdowns last year. Maintenance outages were higher by $16 million or $0.03 per in the first quarter. And input cost unfavorably impacted earnings by $0.07 per share sequentially, largely due to increased costs for OCC, with the remainder from higher energy and chemicals.
And finally, corporate items unfavorably impacted earnings by $0.07 per share sequentially, primarily due to FX and reserve adjustments that were favorable in the fourth quarter. Turning to the segments and starting with Industrial Packaging on Slide seven. Price and mix was higher due to significant benefit from our Box Go-to-Market strategy, which contributed approximately $110 million of earnings benefit from improved margins and mix. This was partially offset by the majority of prior sales price index declines on 2023, which negatively impacted earnings by approximately $53 million. With that said, the February index publication of $40 per ton increase will flow through our contracts primarily over the next couple of quarters.
In addition, the commercial benefits from our Box Go-to-Market strategy exceeded our expectations for the first quarter and the commercial teams remain focused on pursuing additional opportunities going forward. Volume was lower as first quarter represents our seasonally lowest shipment quarter of the year and was also adversely impacted by the January freeze. Also, our Box Go-to-Market strategy is about making choices that will likely impact our volume in the near term, but will allow us to improve our margins and mix the long term.
Although we expect to trail the industry for the next few quarters when measuring unit volume growth, we fully expect the volume impact to be tempered as we continue to transition toward our target mix of customers and invest in the business to maximize profitability. Operations and costs included a $34 million unfavorable impact from the January winter freeze and the Ixtac box plant fire in March. The remainder was primarily due to cost inflation, including items such as labor, materials, contracted maintenance services and higher cost of employee benefits. There was also lower fixed cost absorption from seasonally lower volumes.
However, this was partially offset by $22 million of fixed cost savings from the Orange mill closure. Outside of the January freeze our mill system ran very well in the first quarter. Planned maintenance outages were higher by $26 million sequential and input costs were higher primarily due to higher OCC costs.
On Slide eight, we thought it would be helpful to update you on segment trends for our North American packaging business like we did last quarter. We continue to see stable to improving demand across all end-use segments. Let me highlight some of the trends based on customer feedback. E-commerce continues to be very resilient, up mid-single digits on a year-over-year basis in quarter and significantly above pre-COVID levels. Food and beverage has been relatively stable overall. The overall Fresh Food segment continues to benefit from solid performance across the foodservice channel as well as consumer shifts toward make at-home mills in lieu of Processed Food and its convenience.
The Processed Food segment is beginning to show signs of improvement as some and retailers are running promotions to improve sales volumes. The produce segment was about flat in the first quarter with a drag from wet weather in the Western U.S. However, this segment is expected to recover in the second quarter. And the Protein segment is improving following a period of supply reductions in beef and poultry. Poultry remains a preferred choice by consumers based on value. The beverage segment remains under pressure as budget-conscious consumers have reduced consumption of specialty beverages and bottled beer, which tend to be more packaging intensive.
In summary, based on these trends, we believe industry box demand will grow approximately 2% to 3% in 2024. We understand the critical role of corrugated packaging plays and bringing essential products to consumers, and we believe that IP is well positioned to grow our customers -- with our customers over the long term. Moving to Global Cellulose Fibers on Slide nine. Price and mix was higher due to price index movement and the GCF optimization strategy driving benefits from higher absorbent pulp mix and the reduction of commodity grades.
Volumes sequentially was relatively flat overall as improved demand for absorbent pulp was offset by lower sales of commodity grades as we continue to focus on strategic aligning our business with the most attractive customers and segments. Operations and cost was unfavorable sequentially due to the January freeze and cost inflation, including labor, materials, contracted services and higher cost of employee benefits and some timing of spend.
Most of this was offset by $12 million of lower fixed costs resulting from the two pulp machine closures at our Mills in Riegelwood, North Carolina and Pensacola, Florida. Planned maintenance outages were lower in quarter by $10 million and also included a $24 million outage related to the Georgetown's white papers machine that unfavorably impacted earnings in the first quarter, but is expected to be recovered throughout the year through an existing supply agreement with Sylvamo. Finally, input costs were higher by $7 million, primarily due to higher energy costs during the January 3.
On Slide 10, we'll take a look at our second quarter outlook. I'll start with Industrial Packaging. We expect price and mix to improve earnings by $65 million sequentially. This is the result of the prior index movement in North America, higher export prices to date as well as continued progress with our Box Go-to-Market strategy. Volume is expected to increase earnings by $55 million, primarily due to seasonally higher daily with one more shipping day. Operations and cost is expected to decrease earnings by $70 million. This includes proactive maintenance spending beyond our full-scale mill annual outage program.
As we anticipate continued demand recovery and increased equipment utilization, this spending is focused on improving productivity and efficiencies across our mills and box plant network. We will continue to experience additional inflation and higher S&A including additional commercial resources to support our Box Go-to-Market strategy. Higher maintenance outage expenses expected to decrease earnings by $4 million. Included in that total is a $19 million outage related to the Riverdale white papers machine that will be recovered throughout the year through an existing supply agreement with Sylvamo.
And lastly, input costs are expected to be stable overall as higher OCC costs are expected to be offset by lower energy costs. Switching to Global Cellulose Fibers, we expect price and mix to increase earnings by $15 million as a result of prior index movements. Volume is expected to remain flat as we reduce exposure to commodity grades and grow with absorbent pulp.
Operations and costs are expected to increase earnings by $20 million, primarily due to lower fixed costs resulting from pulp machine closures in our Riegelwood and Pensacola mills, the nonrepeat of the January freight and time of spending. Lower maintenance outage expense is expected to increase earnings in the second quarter by $19 million. This sequential improvement reflects the $24 million Georgetown paper outage that occurred in the first quarter, which we expect to recover throughout the rest of the year. And lastly, input costs are expected to be stable.
With that, I'll turn it back over to Mark.
