International Paper Q1 Earnings Miss Estimates, Increase Y/Y

International Paper Company IP reported first-quarter 2025 adjusted earnings of 23 cents per share, missing the Zacks Consensus Estimate of 35 cents. The bottom line improved 35% year over year, driven by the DS Smith acquisition and price increases.IP posted a net loss per share of 24 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, environmental remediation adjustments, Global Cellulose Fibers strategic options costs and gain on sale of fixed assets. The company posted earnings of 16 cents in the year-ago quarter.Net sales were $5.9 billion in the quarter under review, up 27.8% from the year-ago quarter. The top line missed the Zacks Consensus Estimate of $6.6 billion. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)International Paper Company Price, Consensus and EPS Surprise  International Paper Company price-consensus-eps-surprise-chart | International Paper Company QuoteInternational Paper’s Q1 Gross Margin Rises Y/YThe cost of sales was $4.25 billion in the quarter under review, up 24.4% from the year-ago quarter’s $3.42 billion. Gross profit rose 37.4% year over year to $1.64 billion. The gross margin came in at 27.8% compared with the year-ago quarter’s 25.9%. Selling and administrative costs were $530 million, which increased 48% from $358 million in the prior-year quarter. Adjusted operating profit in the quarter was $101 million, which marked a 65.6% surge from $61 million in the first quarter of 2024.IP’s Segment Performances in Q1On 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.Packaging Solutions North America: The segment’s sales were $3.7 billion, up 6.2% from the last-year figure due to the addition of DS Smith North America business. Sales were also driven by higher sales prices for boxes, partially offset by seasonally lower volumes and softer-than-expected box demand. Our projection for the segment’s sales was $3.8 billion. Operating profit fell 26% year over year to $142 million. Our model anticipated an operating profit of $285 million.Packaging Solutions EMEA: The segment’s sales were $1.55 billion, up from the last-year figure of $0.35 billion due to the addition of the DS Smith EMEA business. Our projection for the segment’s sales was $2.43 billion. Operating profit soared 91.7% year over year to $46 million. Our model anticipated an operating profit of $88 million.Global Cellulose Fibers: The segment’s sales declined 8.7% year over year to $643 million in the first quarter, attributed to lower prices and lower volumes. We predicted sales of $608 million for the segment. The segment reported an operating profit of $17 million in the quarter against the operating loss of $47 million incurred in the year-ago quarter. Our model anticipated an operating profit of $19.5 million.International Paper’s Cash & Debt PositionCash and temporary investments aggregated $1.16 billion at the end of the first quarter of 2025 compared with $1.17 billion at the end of 2024. At the end of the first quarter of 2025, IP’s long-term debt was $9.18 billion, up from $5.37 billion at the end of 2024. Cash used in operating activities was $288 million in the first quarter of 2025 against a cash inflow of $395 million in the first quarter of 2024.IP’s Expectations for 2025International Paper targets sales of $27 billion for 2025, incorporating the contribution from the DS Smith acquisition. This indicates a 45% increase from sales of $18.6 billion reported in 2024.Sales for North American Packaging Solutions are expected to be $15.5 billion on demand growth and prices. EMEA Packaging Solutions' sales are projected to be $9 billion. Weaker-than-expected volumes due to lower industrial production and decreased prices are expected to get reflected in the results. The Global Cellulose Fibers segment is expected to contribute $2.5 billion to sales in the year.The company forecasts adjusted total EBITDA of $3.5-$4 billion for 2025. IP had reported adjusted EBITDA of $1.99 billion in 2024. The adjusted EBITDA for North American Packaging Solutions is projected to be $2.3- $2.5 billion. The metric for EMEA Packaging is pegged at $0.9-$1.1 billion. The Global Cellulose Fibers segment’s adjusted EBITDA is guided at $0.3- $0.4 billion.International Paper Stock’s Price PerformanceThe company’s shares have gained 41.4% in the past year compared with the industry’s 25.5% rise.  Image Source: Zacks Investment Research IP’s Zacks RankInternational Paper currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Q1 Performance of International Paper’s PeerPackaging Corporation of America PKG reported adjusted earnings per share of $2.31 in the first quarter of 2025, beating the Zacks Consensus Estimate of $2.21. The bottom line increased 34% year over year. The figure was above the company’s guidance of $2.21.Packaging Corp’s sales in the first quarter rose 8.2% year over year to $2.141 billion. PKG’s top line surpassed the Zacks Consensus Estimate of $2.140 billion.Paper & Related Product Stocks Awaiting ResultsSmurfit Westrock PLC SW is scheduled to release first-quarter results on May 1. The Zacks Consensus Estimate for sales is pegged at $7.85 billion, indicating a year-over-year surge of 66%. The estimate for Smurfit Westrock’s earnings is 65 cents per share, indicating a solid improvement from 39 cents in the first quarter of 2024.Smurfit Westrock currently carries a Zacks Rank #3.Rayonier Advanced Materials RYAM is expected to release first-quarter 2025 results on May 6. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 14 cents per share. The company incurred a loss of 2 cents in the year-ago quarter.The consensus estimate for the RYAM’s top line is pegged at $388.6 million, indicating 0.2% growth from the prior-year reported figure.RYAM currently carries a Zacks Rank of 3.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>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 International Paper Company (IP): Free Stock Analysis Report Packaging Corporation of America (PKG): Free Stock Analysis Report Rayonier Advanced Materials Inc. (RYAM): Free Stock Analysis Report Smurfit Westrock PLC (SW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks