International Paper 2025 Q2 Earnings Misses Targets as Net Income Falls 84.9%

International Paper (IP) reported its fiscal 2025 Q2 earnings on Jul 31st, 2025. The company missed Wall Street estimates for second-quarter profit, impacted by increased input costs for its corrugated cardboard and fiber packaging products. Guidance for the third quarter anticipates stronger global revenue and earnings due to strategic wins and cost-out initiatives. CEO Andy Silvernail remains focused on securing an advantaged cost position and delivering superior customer experiences as part of the company's transformation into a sustainable global packaging leader.

Revenue
International Paper's revenue saw a substantial increase of 42.9% to $6.77 billion in 2025 Q2 compared to $4.73 billion in 2024 Q2. The North American Packaging Solutions segment generated $3.86 billion, marking a significant contribution. Meanwhile, Packaging Solutions EMEA reported $2.29 billion, reflecting its expansion post-acquisition. Global Cellulose Fibers added $628 million, despite facing cost challenges. Corporate and inter-segment sales recorded a deficit of $12 million.

Earnings/Net Income
EPS for International Paper declined dramatically by 90.2% to $0.14 in 2025 Q2 from $1.43 in 2024 Q2, while net income fell 84.9% to $75 million from $498 million. The significant drop reflects adverse market conditions and increased cost pressures.

Price Action
The stock price of International Paper fell by 8.42% during the latest trading day, 14.71% over the past week, and slightly decreased by 0.19% month-to-date.

Post-Earnings Price Action Review
The investment strategy of purchasing International Paper shares following a quarter-over-quarter revenue increase and holding for 30 days has historically yielded moderate returns but underperformed the industry benchmark. With a compound annual growth rate (CAGR) of 7.96%, the strategy lagged behind the benchmark by 39.32%. Despite a maximum drawdown of 0.00%, the strategy's Sharpe ratio stood at 0.27, indicating low risk but conservative returns. This approach illustrates the challenges faced by investors in achieving substantial gains amidst market volatility and company-specific risks.

CEO Commentary
"I'm pleased to see our teams gaining momentum as we advance our transformation journey," said Chief Executive Officer Andy Silvernail. The second-quarter results reflect the integration of International Paper and DS Smith packaging businesses, supported by effective commercial strategies in Packaging Solutions North America that drove revenue growth. However, margins faced challenges due to cost pressures and a heavy outage schedule. In Europe, demand remains soft, and increased depreciation expenses were noted post-acquisition. Silvernail highlighted exceeding expectations on commercial initiatives and the ongoing pursuit of cost efficiency by year-end.

Guidance
Looking ahead, Silvernail expects stronger global revenue and earnings in the third quarter, bolstered by confirmed strategic wins in packaging and continued progress on cost-out initiatives. He indicated fewer planned maintenance outages and emphasized the company's commitment to achieving an advantaged cost position, enhancing customer experience, and sustaining a high relative supply position as International Paper continues transforming into a differentiated and sustainable global packaging company.

Additional News
In April 2025, International Paper entered exclusive negotiations with PALM Group for the sale of five European corrugated box plants, including facilities in France, Portugal, and Spain, as part of regulatory commitments following its acquisition of DS Smith Plc. This divestment aims to align with European Commission stipulations and is expected to finalize by the end of Q2 2025. Additionally, International Paper announced the successful completion of DS Smith acquisition integration, which expands its market presence in North America and EMEA regions, creating a leading sustainable packaging company. The company continues to focus on strategic growth initiatives and maintaining strong international operations.