IP Earnings Miss Estimates in Q4, Sales Beat and Rise Y/Y

Core Insights - International Paper Company (IP) reported a fourth-quarter 2025 adjusted loss of eight cents per share, missing the Zacks Consensus Estimate for earnings of 28 cents [1] - The company plans to separate its PS North America and PS EMEA operations into two independent, publicly traded companies, expected to be completed within 12–15 months [2] Financial Performance - The company reported a net loss of $4.48 per share, compared to earnings of 25 cents in the same quarter last year [3] - Net sales reached $6 billion, a 53% increase year-over-year, surpassing the Zacks Consensus Estimate of $5.88 billion [3] - Cost of sales was $4.12 billion, up 49% from $2.88 billion in the prior-year quarter, while gross profit rose 63% to $1.88 billion, resulting in a gross margin of 31.4% [4] - Selling and administrative costs increased by 13% to $545 million, and the adjusted operating loss was $43 million compared to an adjusted operating profit of $135 million in Q4 2024 [4] Segment Performance - Packaging Solutions North America reported sales of $3.7 billion, a 5% increase from the prior year, with an operating profit of $319 million [6] - Packaging Solutions EMEA saw sales of $2.3 billion, significantly up from $0.36 billion last year, but reported an operating loss of $223 million [7] Cash and Debt Position - Cash and temporary investments totaled approximately $1.14 billion at the end of 2025, up from $1.06 billion at the end of 2024 [8] - Long-term debt increased to $8.8 billion from $5.36 billion in 2024, while cash flow from operating activities was $1.7 billion, slightly up from $1.68 billion in 2024 [8] Future Expectations - The company anticipates adjusted EBITDA from continuing operations to be between $3.5 billion and $3.7 billion for 2026, with a first-quarter expectation of $0.74 billion to $0.76 billion [11] - IP's stock has declined by 28.4% over the past year, compared to a 15.9% decline in the industry [11]