International Paper Q2 Earnings Miss Estimates, Sales Increase Y/Y

International Paper Company IP has reported second-quarter 2025 adjusted earnings of 20 cents per share, which missed the Zacks Consensus Estimate for earnings of 38 cents by 47%. The bottom line plummeted 64% year over year.

IP posted earnings per share (EPS) of 14 cents from continuing operations in the first quarter, including one-time items, such as combination costs related to the acquisition of DS Smith, severance costs and Global Cellulose Fibers strategic options costs. The company posted earnings of $1.41 in the year-ago quarter.

Net sales were $6.767 billion in the quarter under review, up 42.9% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $6.770 billion.

International Paper’s Q2 Gross Profit Rises Y/Y

The cost of sales was $4.88 billion in the quarter under review, up 45.1% from the year-ago quarter’s $3.36 billion. Gross profit rose 37.6% year over year to $1.89 billion. The gross margin came in at 27.9% compared with the year-ago quarter’s 29%.

Selling and administrative costs were $578 million, which increased 27.6% from $453 million in the prior-year quarter. Adjusted operating profit in the quarter was $105 million, which marked a 45.6% decrease from $193 million in the second quarter of 2024.

IP’s Segment Performances in Q2

On Jan. 31, 2025, International Paper completed the previously announced acquisition of DS Smith, forming a global leader in sustainable packaging solutions with a focus on the North America and EMEA markets. As a result, the company will now operate its financial results in three segments — Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers. The company started posting combined company reports from the first quarter of 2025. 

Packaging Solutions North America: The segment’s sales were $3.86 billion, up 6.4% from the last-year figure due to higher sales prices for boxes, and containerboard and seasonally higher box volumes. Our projection for the segment’s sales was $4.01 billion. Operating profit fell 1.4% year over year to $277 million. Our model anticipated an operating profit of $309 million.

Packaging Solutions EMEA: The segment’s sales were $2.29 billion, up from the last-year figure of $0.35 billion due to higher sales prices and the addition of the DS Smith EMEA business. Our projection for the segment’s sales was $2.23 billion. The segment reported an operating loss of $1 million against the prior year quarter’s operating profit of $10 million. The downside was due to lower volumes in a soft demand environment and planned maintenance outage costs.

Global Cellulose Fibers: The segment’s sales declined 12.4% year over year to $628 million in the second quarter, attributed to lower volumes. We predicted sales of $652 million for the segment. The segment reported an operating loss of $4 million in the quarter against the operating profit of $31 million in the year-ago quarter. Our model anticipated an operating loss of $4.1 million.

International Paper’s Cash & Debt Position

Cash and temporary investments aggregated $1.13 billion at the end of the second quarter compared with $1.17 billion at the end of 2024. 
 
At the end of the reported quarter, IP’s long-term debt was $9.69 billion, higher than $5.34 billion as of 2024-end. Cash flow from operating activities was $188 million in the first half of 2025 compared with $760 million in the first half of 2024.

IP Stock’s Price Performance

The company’s shares have gained 19.6% in the past year compared with the industry’s 28.5% rise.

International Paper’s Zacks Rank

IP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Paper & Related Product Stocks Awaiting Results

Rayonier Advanced Materials RYAM is set to release second-quarter 2025 results on August 5. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 20 cents per share. The company posted earnings of 19 cents per share in the year-ago quarter.

The consensus estimate for RYAM’s top line is pegged at $404 million, indicating a 3.5% decline from the prior-year reported figure.

Performance of Other Packaging Stocks

Packaging Corporation of America PKG reported an adjusted EPS of $2.48 in the second quarter of 2025, beating the Zacks Consensus Estimate of $2.44. The reported figure was higher than PKG’s guidance of $2.41 in the quarter under review. Moreover, the bottom line increased 13% year over year. The upside was driven by higher prices and mix in both segments.

PKG’s sales in the second quarter grew 4.6% year over year to $2.17 billion. The top line beat the Zacks Consensus Estimate of $2.16 billion.

Smurfit Westrock Plc SW reported earnings of 45 cents per share in second-quarter 2025, missing the Zacks Consensus Estimate of 57 cents by a 21% margin. The company posted earnings of 69 cents in the year-ago quarter.

Smurfit Westrock’s net sales in the second quarter of 2025 were $7.94 billion, which beat the Zacks Consensus Estimate of $7.92 billion. The year-ago quarter’s sales were $2.97 billion.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research