IP Earnings & Sales Miss Estimates in Q3 on Lower Volumes

International Paper Company IP has reported third-quarter 2025 adjusted loss of 43 cents per share, which missed the Zacks Consensus Estimate for earnings of 53 cents. This includes $675 million of accelerated deprecation associated with mill closures and 80/20 strategic actions. The adjusted loss for the quarter compares unfavorably with the company’s restated adjusted earnings of 33 cents per share for the year-ago quarter. 

Net sales were $6.22 billion in the quarter under review, up 56.4% from the year-ago quarter driven by acquisition of DS Smith. The top line missed the Zacks Consensus Estimate of $6.89 billion.

International Paper’s Q3 Gross Profit Rises Y/Y

The cost of sales was $4.29 billion in the quarter under review, up 48.9% from the year-ago quarter’s $2.88 billion. Gross profit rose 76.1% year over year to $1.94 billion. The gross margin came in at 31.1% compared with the year-ago quarter’s 27.6%.

Selling and administrative costs were $493 million, which increased 4.2% from $473 million in the prior-year quarter. The adjusted operating loss in the quarter was $224 million against an adjusted operating profit of $113 million in the third quarter of 2024.

IP’s Segment Performances in Q3

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.

On Aug. 21, International Paper announced that it reached a definitive agreement with American Industrial Partners to sell its Global Cellulose Fibers business for $1.5 billion, subject to closing adjustments. As a result, the Global Cellulose Fibers segment has now been classified as a discontinued operation. The company will now operate its financial results in two segments — Packaging Solutions North America and Packaging Solutions EMEA.

Packaging Solutions North America: The segment’s sales were $3.9 billion, up 7.1% from the prior-year figure due to higher sales prices and volumes for boxes. This was negated by lower containerboard volumes. Our projection for the segment’s sales was $3.87 billion. The company reported an operating loss of $166 million against an operating profit of $190 million in the prior-year quarter. 

Packaging Solutions EMEA: The segment’s sales were $2.31 billion, up from the last-year figure of $0.32 billion due to higher sales prices. Our projection for the segment’s sales was $2.37 billion. The segment reported an operating loss of $58 million against the prior-year quarter’s operating profit of $7 million. The downside was due to lower volumes in a soft demand environment.

International Paper’s Cash & Debt Position

Cash and temporary investments aggregated around $1 billion at the end of the third quarter compared with $1.06 billion at the end of 2024.
 
At the end of the reported quarter, IP’s long-term debt was $8.99 billion, higher than $5.36 billion as of the 2024-end. Cash flow from operating activities was $0.79 billion in the first nine months of 2025 compared with $1.28 billion in the first nine months of 2024.

IP Stock’s Price Performance

The company’s shares have lost 6.5% in the past year compared with the industry’s 10.2% decline.

International Paper’s Zacks Rank

IP currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Paper & Related Product Stock Awaiting Results

Rayonier Advanced Materials RYAM is set to release third-quarter 2025 results on Nov. 4. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 7 cents per share. The company posted a loss of 12 cents per share in the year-ago quarter.

The consensus estimate for Rayonier Advanced Materials’ top line is pegged at $376 million, indicating a 6.1% decline from the prior-year reported figure.

Performances of Other Packaging Stocks

Packaging Corporation of America PKG posted adjusted earnings per share of $2.73 in the third quarter of 2025, missing the Zacks Consensus Estimate of $2.83 by 4%.

The bottom line, however, increased 3% year over year, supported by higher prices and mix in both segments, along with lower fiber costs and maintenance outage expenses. Packaging Corp’s sales in the third quarter grew 6% year over year to $2.3 billion. The top line beat the Zacks Consensus Estimate of $2.26 billion.

Smurfit Westrock Plc SW reported earnings of 58 cents per share in third-quarter 2025, missing the Zacks Consensus Estimate of 68 cents. The company posted earnings of 48 cents in the year-ago quarter.

Smurfit Westrock’s net sales in the third quarter of 2025 were $8.00 billion, which beat the Zacks Consensus Estimate of $7.97 billion. The year-ago quarter’s sales were $7.67 billion.

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

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