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STAMFORD, Conn. (AP) _ International Paper Co. reported first-quarter net earnings of $65 million Friday, and said the company is well positioned to take advantage of an economic rebound.

The gain of 13 cents per share compared with a net loss of $44 million, or 9 cents per share, for the same period last year.

Excluding one-time charges, IP reported profits of $58 million, or 12 cents per share. Analysts polled by Thomson Financial/First Call had expected a per-share profit of 7 cents before unusual items.

``We completed the first quarter with strong momentum, and we continue to improve our underlying cost structure in a difficult macro environment,'' chief executive John Dillon said in a statement.

Dillon said IP has significantly reduced inventories from last year's levels, and has divested more than $3 billion in assets.

IP is the world's largest paper company.

Analyst Stephen Atkinson said IP's strong performance is attributable to improvements in distribution and cost control.

``The cost reduction program resulted in a $70 million improvement from the fourth quarter,'' said Atkinson, of BMO Nesbitt Burns.

Atkinson said the company was able to balance out lower pricing by selling more product.

Special items in the fourth-quarter totaled $118 million and included charges for Champion merger integration and costs related to the impairment of the Masonite business.

First-quarter sales were $6 billion, down 13 percent from $6.9 billion in the same period last year.

Shares of IP rose 71 cents to $42.04 in afternoon trading Friday on the New York Stock Exchange.

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On the Net:

http://www.internationalpaper.com