International Paper Reports First Quarter 2025 Results

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]