International Paper (NYSE:IP) Issues Earnings Results, Misses Expectations By $0.36 EPS

International Paper (NYSE:IP) posted its quarterly earnings results on Thursday. The basic materials company reported ($0.08) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.28 by ($0.36), FiscalAI reports. The business had revenue of $6.01 billion during the quarter, compared to analyst estimates of $5.90 billion. International Paper had a negative return on equity of 0.16% and a negative net margin of 5.45%.The business’s revenue for the quarter was up 53.1% on a year-over-year basis. During the same period last year, the company earned ($0.02) EPS.

Here are the key takeaways from International Paper’s conference call:

• The company will split into two publicly traded regional packaging leaders — a standalone North America IP and a standalone EMEA Packaging business — via a planned spin-off (12–15 months), intended to unlock regional value through focused leadership, tailored capital allocation, and dual listings in London and New York.
• Management provided pro forma scale and explicit targets: standalone North America (FY2025 pro forma sales >$15B / adj. EBITDA ~$2.3B), EMEA (~$8.5B / adj. EBITDA ~$0.8B), and enterprise 2026 guidance of $24.1–$24.9B sales, $3.5–$3.7B adj. EBITDA and $300–$500M free cash flow, with a stated ambition of reaching $5B EBITDA by 2027.
• Price increases have been communicated to customers (price letters issued), but the 2026 guidance excludes any assumed price realization; management notes each $10/ton of price that sticks equates to roughly $90M of annualized adj. EBITDA upside.
• Execution of the 80/20 transformation is progressing: ~$710M of cost-out actions to date (including ~$510M run-rate in North America), planned incremental cost and commercial benefits in 2026 (NA: ~$500M cost / $100M commercial; EMEA: ~$200M cost / $200M commercial) and targeted investments to improve mill reliability and customer service.
• Near-term headwinds include high non-recurring transformation and reliability costs (e.g., Riverdale conversion, elevated maintenance/outages), a $958M hit from accelerated depreciation, negative FCF in 2025, potential Q1 storm impact (~$20–$25M), and management acknowledges free cash flow may not fully cover the dividend in 2026 without additional actions post-spin.

International Paper Trading Down 5.9%

IP opened at $39.06 on Friday. International Paper has a 1-year low of $35.56 and a 1-year high of $58.11. The stock has a market capitalization of $20.63 billion, a PE ratio of -14.97, a PEG ratio of 0.48 and a beta of 1.10. The company has a current ratio of 1.31, a quick ratio of 1.04 and a debt-to-equity ratio of 0.52. The firm has a 50-day moving average price of $40.18 and a two-hundred day moving average price of $44.17.

Insider Activity at International Paper

In related news, SVP Clay R. Ellis sold 18,819 shares of the firm’s stock in a transaction that occurred on Tuesday, November 18th. The shares were sold at an average price of $36.85, for a total value of $693,480.15. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. 0.35% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the company. Kelleher Financial Advisors acquired a new stake in shares of International Paper in the 3rd quarter valued at $36,000. MUFG Securities EMEA plc bought a new position in International Paper in the second quarter valued at about $73,000. Boothbay Fund Management LLC acquired a new stake in International Paper in the third quarter worth about $226,000. Dynamic Technology Lab Private Ltd bought a new stake in International Paper during the 1st quarter worth about $249,000. Finally, State of Wyoming lifted its position in International Paper by 163.1% during the 2nd quarter. State of Wyoming now owns 5,446 shares of the basic materials company’s stock valued at $255,000 after purchasing an additional 3,376 shares during the period. 81.95% of the stock is currently owned by institutional investors.

International Paper News Roundup

Here are the key news stories impacting International Paper this week:

• Positive Sentiment: Management is pursuing a strategic split to create two focused, regional packaging companies — a North American IP and a separate EMEA packaging company — which could unlock value and allow each business to pursue tailored cost and growth strategies. International Paper to Create Two Independent Public Companies
• Positive Sentiment: Top-line strength: Q4 revenue rose ~53% year‑over‑year and management set 2026 adjusted EBITDA targets ($3.5–$3.7B) and Q1 guidance, supporting the view that core operating cash generation can recover as restructuring and rationalization complete. Full-Year and Fourth Quarter 2025 Results
• Neutral Sentiment: Brokerage consensus remains cautious; Street ratings cluster around “Hold,” reflecting uncertainty about near‑term performance and the path to realizing benefits from the split. Consensus Rating of “Hold”
• Neutral Sentiment: Analyst previews and coverage note mixed signals heading into/after the print — some focus on operational improvement, others on restructuring/headwind visibility. Preview: International Paper’s Earnings
• Negative Sentiment: Q4 earnings missed expectations: adjusted EPS was a loss and the company reported a wider loss from continuing operations after taking a $2.47B pre‑tax non‑cash goodwill impairment and other non‑cash/one‑time charges, which drove a disappointing headline EPS and damaged near‑term reported profitability. Q4 Results and Impairment Details
• Negative Sentiment: Market reaction was negative: investors trimmed positions after the mixed results and the split announcement — concerns include execution risk of creating two public companies, legacy integration issues from past M&A (DS Smith assets), and near‑term cash/earnings volatility. WSJ: Splitting in Two; Wider Quarterly Loss
• Negative Sentiment: Underlying financials show strain: negative net margin/ROE for the period, significant restructuring/accelerated depreciation charges, and full‑year free cash flow was slightly negative — all of which add near‑term financial stress until cost actions and the split realize benefits. Zacks: Earnings Miss, Sales Beat

Analyst Upgrades and Downgrades

Several analysts recently commented on IP shares. Argus decreased their price target on International Paper from $55.00 to $50.00 and set a “buy” rating on the stock in a research note on Monday, December 22nd. JPMorgan Chase & Co. cut their price objective on International Paper from $46.00 to $45.00 and set a “neutral” rating for the company in a report on Wednesday, January 21st. Truist Financial upped their target price on shares of International Paper from $47.00 to $50.00 and gave the stock a “buy” rating in a report on Tuesday, January 6th. Royal Bank Of Canada reissued an “outperform” rating on shares of International Paper in a report on Friday. Finally, Citigroup reduced their price target on shares of International Paper from $55.00 to $46.00 and set a “buy” rating on the stock in a research report on Monday, November 3rd. Nine analysts have rated the stock with a Buy rating, two have given a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, the company has a consensus rating of “Moderate Buy” and an average price target of $49.44.

International Paper Company Profile

International Paper is a global producer of renewable fiber-based products, focused primarily on pulp, paper, and packaging. The company manufactures containerboard and corrugated packaging used for shipping and retail display, as well as a range of specialty papers and pulp products that serve industrial, consumer goods, and e-commerce customers. Its product portfolio is oriented toward large-scale packaging solutions, tissue and paper grades, and raw pulp for a variety of manufacturing uses.

Founded in 1898, International Paper is headquartered in Memphis, Tennessee, and is one of the largest and longest-established companies in the forest products sector.