Clearwater Paper 2025 Q2 Earnings Strong Recovery with Net Income Swinging 110.5%

Clearwater Paper (CLW) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The company delivered a strong performance, with net income swinging to $2.70 million from a loss of $25.80 million in the previous year, marking a 110.5% positive change. Clearwater Paper's results aligned with expectations, demonstrating effective cost reduction and operational efficiencies. Despite industry challenges, the company maintained its focus on operational execution and customer retention. Looking ahead, Clearwater Paper aims to achieve targeted fixed cost reductions and navigate the current industry oversupply while preparing for potential market recovery.

Revenue

Clearwater Paper reported a 13.8% increase in total revenue for 2025 Q2, amounting to $391.80 million, compared to $344.40 million in the same period of 2024.

Earnings/Net Income

Clearwater Paper returned to profitability with an EPS of $0.17 in 2025 Q2, reversing from a loss of $1.55 per share in 2024 Q2. The positive EPS reflects significant improvement.

Price Action

The stock price of Clearwater Paper has edged down 0.41% during the latest trading day, has edged up 2.29% during the most recent full trading week, and has climbed 5.22% month-to-date.

Post-Earnings Price Action Review

The strategy of purchasing Clearwater Paper shares following a quarterly revenue increase and holding for 30 days has proven ineffective over the past three years. This approach resulted in a negative compound annual growth rate of -6.98%, highlighting its high risk and lack of return. The strategy's excess return was significantly below the benchmark, with a negative result of -117.57% compared to a benchmark return of 87.35%. This substantial underperformance is further emphasized by the strategy's Sharpe ratio of -0.16, indicating a poor risk-adjusted return. As a result, this investment tactic has not demonstrated effectiveness in generating positive returns, underscoring the need for a revised approach.

CEO Commentary

“We delivered a strong second quarter inline with our expectations, with higher shipments, higher production, and lower fixed costs,” said Arsen Kitch, President and Chief Executive Officer. The company experienced a 14% increase in net sales, primarily driven by incremental volume from the acquisition of the Augusta mill. Net income from continuing operations improved significantly, reflecting effective cost reduction actions and operational efficiencies. Despite lower sales prices and industry challenges, Clearwater Paper remains focused on enhancing operational execution and customer retention, positioning the company favorably for future recovery.

Guidance

“We remain focused on what is within our control, namely strong operational execution, reducing our fixed costs, and maintaining share with our customers,” Kitch noted. The company aims to deliver targeted fixed cost reductions of $30 to $40 million in 2025 and is committed to navigating the current industry oversupply while preparing for a potential market recovery.

Additional News

Clearwater Paper recently participated in the Wells Fargo Industrials & Materials Conference on June 10, 2025, in Chicago, IL. President and CEO Arsen Kitch engaged in a fireside chat while CFO Sherri Baker joined for one-on-one investor meetings. Additionally, Clearwater Paper announced a $4 million share repurchase during the 2025 Q2 period. Investors will find these developments significant as the company continues to focus on enhancing shareholder value through strategic initiatives and market engagements.