Jefferies said the IRS ruling which appears to exclude the paper-making process from MLP status is a letdown, but noted that the firm had viewed the MLP opportunity as "more of a call" option for the companies in the space. The firm, which said that underlying fundamentals in containerboard have improved materially, views today's pullback as a buying opportunity and does not think there is meaningful further downside for the stocks from current levels. Paperboard stocks that have dropped today after the IRS ruling include KapStone Paper (KS), International Paper (IP), Packaging Corp. (PKG), RockTenn (RKT) and MeadWestvaco (MWV).

Reports Q1 revenue $4.62B, consensus $4.56B. "International Paper made progress executing our strategic initiatives in the first quarter,'' said Mark Sutton, chairman and CEO. "We saw commercial benefits from our business strategies, as well as cost benefits from mill system optimization. Although costs remain elevated and volumes were seasonally lower in the quarter, market trends continue to improve."