Core Viewpoint - International Paper reported quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.35 per share, representing an earnings surprise of -34.29% [1][2] Financial Performance - The company posted revenues of $5.9 billion for the quarter ended March 2025, missing the Zacks Consensus Estimate by 10.70%, compared to year-ago revenues of $4.62 billion [2] - Over the last four quarters, International Paper has surpassed consensus EPS estimates three times [2] Stock Performance - International Paper shares have lost about 11.5% since the beginning of the year, while the S&P 500 has declined by -5.5% [3] - The current consensus EPS estimate for the coming quarter is $0.56 on $6.91 billion in revenues, and for the current fiscal year, it is $2.49 on $27.38 billion in revenues [7] Industry Outlook - The Paper and Related Products industry is currently in the top 11% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

Financial Performance - Q1 2025 - The company's sales for Q1 2025 were $5901 million, compared to $4619 million in Q1 2024[26] - Adjusted EBITDA for Q1 2025 was $769 million, compared to $420 million in Q1 2024[26] - Adjusted operating EPS for Q1 2025 was $023, compared to $017 in Q1 2024[26] - Free cash flow was negative $618 million in Q1 2025, impacted by approximately $670 million from incentive compensation and nonrecurring items[26, 29] Packaging Solutions North America - Sales for Packaging Solutions North America in Q1 2025 were $3702 million, compared to $3486 million in Q1 2024[33] - Adjusted EBITDA for Packaging Solutions North America in Q1 2025 was $554 million, compared to $389 million in Q1 2024[34] - The company anticipates approximately $309 million in EBIT for Packaging Solutions North America in Q2 2025[39] - The company expects approximately $105 billion in adjusted EBITDA for 1H'25 and $135 billion for 2H'25[41] Packaging Solutions EMEA - Sales for Packaging Solutions EMEA in Q1 2025 were $1550 million, compared to $348 million in Q1 2024[46] - Adjusted EBITDA for Packaging Solutions EMEA in Q1 2025 was $153 million, compared to $40 million in Q1 2024[47] - The company anticipates approximately $73 million in EBIT for Packaging Solutions EMEA in Q2 2025[52] - The company expects approximately $040 billion in adjusted EBITDA for 1H'25 and $060 billion for 2H'25[54] Global Cellulose Fibers - Sales for Global Cellulose Fibers in Q1 2025 were $643 million, compared to $704 million in Q1 2024[58] - Adjusted EBITDA for Global Cellulose Fibers in Q1 2025 was $68 million, compared to $7 million in Q1 2024[59] - The company expects approximately $011 billion in adjusted EBITDA for 1H'25 and $025 billion for 2H'25[64]

[First Quarter 2025 Performance Overview](index=1&type=section&id=First%20Quarter%202025%20Performance%20Overview) International Paper reported a net loss in Q1 2025 despite higher sales driven by the DS Smith acquisition, as the company progressed its transformation and 80/20 strategy amidst softer market demand and significant one-time costs [Financial Highlights](index=1&type=section&id=Financial%20Highlights) International Paper reported a net loss of $(105) million, or $(0.24) per share, for the first quarter of 2025, a significant downturn from the net earnings of $56 million in the prior year's quarter; however, adjusted operating earnings were positive at $101 million, or $0.23 per share, with net sales seeing a substantial increase to $5.9 billion primarily driven by the acquisition of DS Smith, while free cash flow was negative at $(618) million, heavily impacted by transaction costs and incentive payouts Q1 2025 Key Financial Metrics (In millions) | | First Quarter 2025 | First Quarter 2024 | Fourth Quarter 2024 | | :--- | :--- | :--- | :--- | | **Net Sales** | $5,901 | $4,619 | $4,580 | | **Net Earnings (Loss)** | $(105) | $56 | $(147) | | **Adjusted Operating Earnings** | $101 | $61 | $(7) | | **Cash Provided By (Used For) Operations** | $(288) | $395 | $397 | | **Free Cash Flow** | $(618) | $144 | $137 | Earnings Per Share (EPS) Comparison | | First Quarter 2025 | First Quarter 2024 | Fourth Quarter 2024 | | :--- | :--- | :--- | :--- | | **Net Earnings (Loss) Per Share** | $(0.24) | $0.16 | $(0.42) | | **Adjusted Operating Earnings Per Share** | $0.23 | $0.17 | $(0.02) | - First quarter net earnings include a significant pre-tax charge of **$271 million** for accelerated depreciation and restructuring related to the closure of the Red River containerboard mill[3](index=3&type=chunk) [CEO Commentary and Strategy](index=1&type=section&id=CEO%20Commentary%20and%20Strategy) The CEO, Andy Silvernail, highlighted the company's progress in its first year of transformation, emphasizing the deployment of the 80/20 strategy to focus on key customers and the successful integration of DS Smith, noting that while the acquisition and cost-saving initiatives drove higher sales and earnings, overall market demand was softer than expected, leading the company to focus on controllable actions, such as accelerating 80/20 execution, to navigate the uncertain macroeconomic environment - The company deployed an 80/20 strategy, focusing on its most valuable customers and aligning resources accordingly[4](index=4&type=chunk) - Q1 2025 results were primarily driven by the DS Smith acquisition, sales price increases, and cost-out initiatives[4](index=4&type=chunk) - Market demand was softer than anticipated in both North American and EMEA regions[4](index=4&type=chunk) - Free cash flow was temporarily impacted by transformation costs and incentive compensation payouts[4](index=4&type=chunk) [Segment Information](index=2&type=section&id=SEGMENT%20INFORMATION) Following the DS Smith acquisition, International Paper reorganized its segments into Packaging Solutions North America, Packaging Solutions EMEA, and Global Cellulose Fibers, with the EMEA segment showing significant growth while other segments experienced mixed results due to specific operational impacts [Segment Restructuring](index=2&type=section&id=Segment%20Restructuring) Following the acquisition of DS Smith on January 31, 2025, International Paper has reorganized its business segments, with the new structure consisting of Packaging Solutions North America, Packaging Solutions EMEA, and Global Cellulose Fibers, where the Packaging Solutions EMEA segment now includes the legacy EMEA business and the newly acquired DS Smith EMEA operations, and prior period results have been recast to align with this new reporting structure - The acquisition of DS Smith was completed on January 31, 2025, prompting a change in the company's organizational and reporting structure[9](index=9&type=chunk) - The new reporting segments are Packaging Solutions North America, Packaging Solutions EMEA, and Global Cellulose Fibers[9](index=9&type=chunk) [Business Segment Results](index=2&type=section&id=Business%20Segment%20Results) In Q1 2025, the Packaging Solutions EMEA segment's net sales and operating profit surged due to the DS Smith acquisition, while Packaging Solutions North America saw higher sales but a decrease in operating profit, largely due to accelerated depreciation from a mill closure, and the Global Cellulose Fibers segment returned to profitability, recovering from a significant loss in the previous quarter that was also impacted by accelerated depreciation Segment Net Sales and Operating Profit (in millions) | | First Quarter 2025 | Fourth Quarter 2024 | First Quarter 2024 | | :--- | :--- | :--- | :--- | | **Net Sales** | | | | | Packaging Solutions North America | $3,702 | $3,539 | $3,486 | | Packaging Solutions EMEA | $1,550 | $357 | $348 | | Global Cellulose Fibers | $643 | $662 | $704 | | **Operating Profit (Loss)** | | | | | Packaging Solutions North America | $142 | $228 | $192 | | Packaging Solutions EMEA | $46 | $19 | $24 | | Global Cellulose Fibers | $17 | $(250) | $(47) | - Packaging Solutions North America's operating profit was impacted by **$193 million** of accelerated depreciation from the Red River mill closure[14](index=14&type=chunk) - Packaging Solutions EMEA's results include **$1.2 billion** in net sales and **$13 million** in operating profit from the newly acquired DS Smith EMEA business[15](index=15&type=chunk) - Global Cellulose Fibers' operating profit improved significantly, swinging to a **$17 million** profit from a **$(250) million** loss in Q4 2024, which included **$215 million** of accelerated depreciation[16](index=16&type=chunk) [Financial Statements and Reconciliations](index=3&type=section&id=Financial%20Statements%20and%20Reconciliations) The company's Q1 2025 financial statements reflect a net loss and negative cash flow, significantly impacted by special charges related to the DS Smith acquisition and restructuring, which also led to a substantial expansion of the balance sheet [Effects of Net Special Items](index=3&type=section&id=EFFECTS%20OF%20NET%20SPECIAL%20ITEMS) The company recorded a net after-tax charge of $204 million ($0.46 per share) from special items in Q1 2025, primarily driven by costs associated with the DS Smith acquisition ($221 million pre-tax) and severance and other restructuring costs ($83 million pre-tax), which were partially offset by a gain on the sale of fixed assets Net Special Items (in millions) | | First Quarter 2025 (Before Tax) | First Quarter 2025 (After Tax) | | :--- | :--- | :--- | | DS Smith combination costs | $221 | $183 | | Severance and other costs | $83 | $63 | | Global Cellulose Fibers strategic options costs | $12 | $9 | | Net (gain) loss on sale of fixed assets | $(67) | $(51) | | **Total special items, net** | **$249** | **$204** | [Consolidated Statement of Operations](index=6&type=section&id=Consolidated%20Statement%20of%20Operations) For the first quarter of 2025, International Paper reported net sales of $5.9 billion and a net loss of $(105) million, compared to net sales of $4.6 billion and net income of $56 million in the same period last year, with the loss primarily due to increased costs, including $571 million in depreciation and amortization (up from $278 million YoY) and $83 million in restructuring charges Consolidated Statement of Operations (in millions) | | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | **Net Sales** | **$5,901** | **$4,619** | | Cost of products sold | $4,259 | $3,424 | | Depreciation and amortization | $571 | $278 | | Restructuring charges, net | $83 | $3 | | Earnings (Loss) Before Income Taxes | $(135) | $85 | | **Net Earnings (Loss)** | **$(105)** | **$56** | [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) The company's balance sheet expanded significantly as of March 31, 2025, due to the DS Smith acquisition, with total assets growing to $41.2 billion from $22.8 billion at the end of 2024, reflected in substantial rises in Goodwill (to $7.2 billion), Intangibles (to $4.6 billion), and Net Plants, Properties, and Equipment (to $16.0 billion), and correspondingly, total liabilities also increased, with long-term debt rising to $9.2 billion Balance Sheet Highlights (in millions) | | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$41,168** | **$22,800** | | Goodwill | $7,242 | $3,038 | | Intangibles, Net | $4,585 | $145 | | **Total Liabilities** | **$23,076** | **$14,627** | | Long-Term Debt | $9,175 | $5,368 | | **Total Equity** | **$18,092** | **$8,173** | [Consolidated Statement of Cash Flows](index=9&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In Q1 2025, the company experienced a net cash outflow from operating activities of $(288) million, a stark contrast to the $395 million inflow in Q1 2024, primarily driven by transaction costs for the DS Smith acquisition and annual incentive compensation payouts, totaling approximately $670 million, while capital expenditures increased to $330 million, contributing to a negative free cash flow of $(618) million Cash Flow Summary (in millions) | | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Cash Provided By (Used For) Operating Activities** | **$(288)** | **$395** | | Invested in capital projects | $(330) | $(251) | | Cash Provided By (Used For) Investment Activities | $237 | $(247) | | Cash Provided By (Used for) Financing Activities | $21 | $(191) | | **Change in Cash and Temporary Investments** | **$(14)** | **$(43)** | - Cash from operations was negatively impacted by approximately **$670 million** due to the timing of annual incentive compensation payout and transaction costs for the DS Smith acquisition[17](index=17&type=chunk) [GAAP to Non-GAAP Reconciliations](index=7&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) The company provides reconciliations for its non-GAAP measures to the most comparable GAAP figures, where for Q1 2025, the GAAP Net Loss of $(105) million was adjusted for $249 million in net special items and $3 million in non-operating pension expense to arrive at an Adjusted Operating Earnings of $101 million, and similarly, Free Cash Flow of $(618) million is reconciled from Cash Provided by (Used For) Operating Activities of $(288) million less capital investments of $330 million Reconciliation of Net Earnings (Loss) to Adjusted Operating Earnings (Q1 2025, in millions) | | Amount | | :--- | :--- | | **Net Earnings (Loss)** | **$(105)** | | Add back: Non-operating pension expense | $3 | | Add back: Net special items expense | $249 | | Income taxes - Non-operating pension and special items | $(46) | | **Adjusted Operating Earnings** | **$101** | Reconciliation of Cash Provided by Operations to Free Cash Flow (Q1 2025, in millions) | | Amount | | :--- | :--- | | **Cash Provided By (Used For) Operating Activities** | **$(288)** | | Adjustments: Cash invested in capital projects | $(330) | | **Free Cash Flow** | **$(618)** | [Other Information](index=4&type=section&id=Other%20Information) This section provides details on the Q1 earnings webcast and includes a cautionary statement regarding forward-looking statements, highlighting key risks and uncertainties [Earnings Webcast](index=4&type=section&id=EARNINGS%20WEBCAST) The company hosted a webcast and teleconference on April 30, 2025, at 10 a.m. ET to discuss the first-quarter earnings and current market conditions, with replay information for both the webcast and an audio-only version provided - An earnings webcast was held on April 30, 2025, at 10 a.m. ET[21](index=21&type=chunk) - Dial-in numbers and a conference ID were provided for teleconference participation, with an audio replay available for ninety days[22](index=22&type=chunk) [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section provides a standard legal disclaimer regarding forward-looking statements made in the press release, cautioning that these statements are not guarantees of future performance and are subject to numerous risks and uncertainties, with key risks highlighted including the ability to successfully integrate the DS Smith acquisition, challenging macroeconomic conditions, inflationary pressures, changes in interest rates, and the company's level of indebtedness - The press release contains forward-looking statements that are not guarantees of future performance and are subject to risks and uncertainties[24](index=24&type=chunk) - Key risk factors include the ability to consummate and achieve benefits from the DS Smith acquisition, challenging economic conditions, supply chain disruptions, and the level of indebtedness[24](index=24&type=chunk) - The company undertakes no obligation to publicly update any forward-looking statements[25](index=25&type=chunk)

Core Insights - International Paper reported a net loss of $105 million, or $(0.24) per diluted share, for Q1 2025, compared to a net income of $56 million, or $0.16 per diluted share, in Q1 2024. Adjusted operating earnings were $101 million, or $0.23 per diluted share [1][4][20] - The increase in net sales to $5.9 billion in Q1 2025 from $4.6 billion in Q1 2024 was primarily driven by the acquisition of DS Smith, sales price increases, and cost reductions [1][3][5] - The company faced a pre-tax charge of $271 million related to accelerated depreciation and restructuring costs due to the closure of the Red River containerboard mill [2][11] Financial Performance - Q1 2025 net sales were $5,901 million, up from $4,619 million in Q1 2024, while net earnings (loss) were $(105) million compared to $56 million in Q1 2024 [5][20] - Adjusted operating earnings for Q1 2025 were $101 million, a significant increase from $(7) million in Q4 2024 and $61 million in Q1 2024 [5][27] - Free cash flow for Q1 2025 was $(618) million, a decline from $144 million in Q1 2024, primarily due to increased capital spending and transformation costs [11][32][33] Segment Performance - The Packaging Solutions North America segment reported net sales of $3,702 million in Q1 2025, up from $3,486 million in Q1 2024, but operating profit decreased to $142 million from $192 million [8][10] - The Packaging Solutions EMEA segment generated net sales of $1,550 million in Q1 2025, with an operating profit of $46 million, compared to $348 million in sales and $24 million in profit in Q1 2024 [8][9] - The Global Cellulose Fibers segment saw a slight improvement in operating profit to $17 million in Q1 2025 from a loss of $(250) million in Q4 2024, despite lower sales [10] Strategic Initiatives - The company is focusing on its 80/20 strategy to enhance performance by prioritizing valuable customers and aligning resources accordingly [3] - The acquisition of DS Smith is expected to strengthen the company's market position in North America and EMEA, although overall market demand has been softer than anticipated [3][6] - Management is taking actions within its control to drive commercial excellence and cost reductions amid an uncertain macroeconomic environment [3]

Core Viewpoint - International Paper Company is set to report its first-quarter 2025 results on April 30, following the acquisition of DS Smith, which is expected to significantly enhance its financial performance compared to the previous year [1][2]. Financial Performance Expectations - The Zacks Consensus Estimate for International Paper's first-quarter revenues is $6.61 billion, reflecting a 43.1% increase from the same quarter last year [3]. - Earnings estimates have decreased by 16.7% over the past 60 days to 35 cents per share, indicating a 106% year-over-year increase from 17 cents reported in the previous year [3]. - The company has a history of earnings surprises, beating estimates in three of the last four quarters with an average surprise of 41.5% [5]. Segment Performance Insights - EMEA Packaging volumes are projected to reach 2,452 thousand short tons in Q1 2025, a significant increase from 340 thousand tons in Q1 2024, with revenues expected at $2.44 billion [7]. - North American Packaging Solutions is anticipated to see year-over-year volume increases in various categories, with revenues estimated at $3.79 billion for the quarter [8][9]. - Overall, Industrial Packaging segment volumes are projected at 6,165 thousand short tons, indicating a 54.5% year-over-year rise, with revenues expected to be $6.2 billion, reflecting a 62.9% increase [10]. Operating Profit Projections - The Industrial Packaging segment's operating profit is expected to surge by 73% to $373 million, with North American Packaging Solutions projected at $285 million and EMEA Packaging at $87.7 million [11]. Global Cellulose Fibers Segment - The Global Cellulose Fibers segment is expected to report volumes of 622 thousand metric tons, a 14.7% year-over-year decline, with revenues estimated at $608 million, down 13.6% from the previous year [12]. Stock Performance - International Paper's stock has increased by 39.1% over the past year, outperforming the industry average growth of 23.6% [14].

Core Points - International Paper has entered exclusive negotiations with PALM Group for the sale of five corrugated box plants in Europe, which includes three plants in Normandy, France, one in Ovar, Portugal, and one in Bilbao, Spain [1][2] - The sale is part of the commitments made to the European Commission following International Paper's acquisition of DS Smith Plc, and the completion of the sale is subject to the Commission's approval [2][3] Company Overview - International Paper is a global leader in sustainable packaging solutions, headquartered in Memphis, Tennessee, with operations in over 30 countries and employing more than 65,000 team members [4] - The company reported net sales of $18.6 billion for 2024 and acquired DS Smith in 2025, enhancing its position in the North American and EMEA regions [4] PALM Group Overview - PALM is a family-owned company based in Aalen, Germany, recognized as a leading European producer of containerboard, graphic paper, and corrugated packaging [5] - In 2024, PALM generated a turnover of €2 billion with a workforce of 4,200 employees [5] Advisory Information - BofA Securities is serving as the exclusive financial advisor to International Paper, while Skadden, Arps, Slate, Meagher & Flom LLP is acting as the legal adviser [6]

Industry Overview - The Zacks Paper and Related Products industry is facing subdued demand due to lower consumer spending and a decline in graphic paper demand driven by digitalization [1][4] - However, increasing packaging requirements from e-commerce and steady demand from consumer-oriented markets like food, beverages, and healthcare are expected to support the industry [1][5] - Environmental awareness is enhancing the appeal of paper as a sustainable packaging alternative, acting as a significant growth driver [1] Major Trends - The transition to digital media has negatively impacted the graphic paper market, leading to a shift in production focus towards packaging and specialty paper [4] - Rising costs for transportation, chemicals, and fuel are pressing concerns, prompting companies to focus on pricing actions, cost reduction, and automation to enhance productivity [4] - Despite current challenges, the industry's exposure to consumer-focused markets ensures stable earnings growth, with global e-commerce revenues projected to reach $4.3 trillion by 2025 [5] M&A Activities - Increased demand for sustainable packaging is driving M&A activities in the industry, exemplified by the merger of Smurfit Kappa and WestRock to form Smurfit Westrock [6] - International Paper's acquisition of DS Smith aims to strengthen its corrugated packaging business and enhance sustainable packaging solutions [6][18] Industry Performance - The Zacks Paper and Related Products industry has outperformed the S&P 500 and the Basic Materials sector over the past year, with a gain of 14.2% compared to a 15.7% decline in the sector [10] - The industry is currently trading at a forward 12-month EV/EBITDA ratio of 8.49X, lower than the S&P 500's 12.88X and the Basic Materials sector's 7.01X [12] Company Highlights - Suzano inaugurated the world's largest single-line pulp mill, increasing its pulp production capacity by 24% to 13.5 million tons per year, leading to record sales of 12.3 million tons in 2024 [15][16] - The Zacks Consensus Estimate for Suzano's 2025 earnings has increased by 26% in the past 90 days, indicating a year-over-year growth of around 304% [16] - International Paper's acquisition of DS Smith is expected to yield $600-$700 million in pre-tax cash synergies by 2027, with projected net sales of $26-$28 billion and adjusted EBITDA of $5.5-$6 billion by 2027 [18]

Core Viewpoint - International Paper, a leader in sustainable packaging solutions, is set to release its first-quarter earnings on April 30, 2025, before the market opens [1]. Group 1: Earnings Release Information - The earnings release will be followed by a webcast discussing the earnings and current market conditions, starting at 10 a.m. ET [2]. - Interested parties can access the webcast through the company's website and a replay will be available approximately two hours after the call [2]. Group 2: Participation Details - Participants wishing to join the webcast via teleconference can dial specific numbers and should connect by 9:45 a.m. ET [3]. - An audio-only replay will be available for ninety days post-call, with specific dial-in instructions provided [3]. Group 3: Company Overview - International Paper is headquartered in Memphis, Tennessee, and operates in over 30 countries, employing more than 65,000 team members [4]. - The company reported net sales of $18.6 billion for 2024 and acquired DS Smith in 2025, enhancing its position in the North American and EMEA markets [4].

Group 1 - International Paper's shares increased over 6% following a positive investor day presentation and outlook despite weaker industrial activity impacting near-term results [1] - The company's stock performance reflects a broader trend of gaining investor confidence based on its strategic outlook [1] Group 2 - The article does not provide specific financial metrics or projections related to International Paper's future performance [1]

Core Viewpoint - International Paper Company (IP) aims for significant growth through strategic initiatives and updated financial targets for 2025 and 2027, focusing on operational optimization and market expansion [1][6]. Financial Targets for 2025 - The company targets revenues of approximately $27 billion in 2025, reflecting a 45% increase from $18.6 billion in 2024 [2]. - Adjusted total EBITDA is projected to be between $3.5 billion and $4.0 billion for 2025, compared to $1.99 billion in 2024 [4]. - Cash flow from operating activities is expected to range from $2 billion to $2.2 billion, with free cash flow anticipated between $0.1 billion and $0.3 billion [5]. Financial Projections for 2027 - For 2027, net sales are projected to be between $26 billion and $28 billion, indicating a compound annual growth rate (CAGR) of 13.2% from 2024 [6]. - Adjusted EBITDA is expected to be between $5.5 billion and $6 billion, suggesting a CAGR of 42.5% over the 2024-2027 period [7]. - Free cash flow guidance for 2027 is set at $2 billion to $2.5 billion, representing a CAGR of 43.8% compared to 2024 [8]. Market Position and Growth Drivers - International Paper is positioned to leverage strong market fundamentals in North America and EMEA, with a total addressable market (TAM) of approximately $50 billion and $40 billion, respectively [9]. - The company anticipates outperforming market growth due to trends such as the rise of e-commerce, demand for sustainable packaging, and the shift from plastic to paper-based solutions [10]. Synergies from DS Smith Acquisition - The expected pre-tax cash synergies from the DS Smith acquisition have been updated to a range of $600 million to $700 million, up from $514 million [12]. - The acquisition is expected to enhance customer value through improved offerings and greater geographic reach [13]. Stock Performance - International Paper's shares have increased by 42.8% over the past year, significantly outperforming the industry average growth of 8.8% [14].