"This year's first quarter results reflect higher sales and earnings, primarily driven by the DS Smith acquisition, sales price increases, and cost out." – Andy Silvernail, Chairman and CEO, International Paper.
April 30, 2025 - International Paper today reported first quarter 2025 net earnings (loss) of $(105) million, or $(0.24) per diluted share, and adjusted operating earnings (non-GAAP) of $101 million, or $0.23 per diluted share. First quarter net sales were $5.9 billion in 2025 and $4.6 billion in 2024.
First quarter net earnings includes a pre-tax charge of $271 million for accelerated depreciation and restructuring charges related to the previously announced closure of the Company's Red River containerboard mill in Campti, Louisiana.
"Reflecting on my first year, I am proud of the International Paper team for embracing transformational change and achieving tremendous progress together," said Andy Silvernail, Chief Executive Officer. "We deployed 80/20, focusing on our most valuable customers and aligning our resources accordingly. We launched key initiatives to drive step-change improvement in our performance, and invested to grow in the most attractive markets. Most recently, we welcomed our DS Smith colleagues and outlined our strategic direction at our Investor Day."
"This year's first quarter results reflect higher sales and earnings, primarily driven by the DS Smith acquisition, sales price increases, and cost out," Silvernail added. "We also made good progress on growing our market position in our North American packaging business. Overall market demand, however, was softer than anticipated in both of our regions. As expected, our free cash flow was temporarily impacted by transformation costs and incentive compensation payout. In this uncertain macroeconomic environment, we are focusing on actions within our control as we accelerate our 80/20 execution to drive commercial excellence and cost out across the company."
SEGMENT INFORMATION
As a result of the completed acquisition of DS Smith on January 31, 2025, the Chief Operating Decision Maker (CODM) now reviews and manages the financial results and operations of the following segments on the basis of the new organizational structure, Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers.
The Packaging Solutions EMEA segment includes the Company's legacy EMEA Industrial Packaging business and the newly acquired EMEA DS Smith business. As such, amounts related to the Company's legacy EMEA Industrial Packaging business have been recast out of the previously reported Industrial Packaging business segment into the new Packaging Solutions EMEA business segment for all prior periods.
The newly acquired North America DS Smith business has been included in the Packaging Solutions North America segment.
Amounts related to the Company's legacy North America Industrial Packaging business have been reported in the Packaging Solutions North America business segment for all prior periods.
Packaging Solutions North America business segment operating profit (loss) in the first quarter of 2025 was $142 million compared with $228 million in the fourth quarter of 2024. The first quarter of 2025 includes net sales of $127 million and business segment operating profit (loss) of $(9) million for the DS Smith North America business. For legacy IP North America Packaging, net sales were higher driven by higher sales prices for boxes partially offset by seasonally lower volumes. Cost of products sold was impacted by higher energy costs, lower recovered fiber costs and higher costs for goods and services. Selling and administrative expense was impacted by lower employee incentive compensation and medical benefit costs. Depreciation and amortization expense includes $193 million of accelerated depreciation associated with the previously announced closure of our Red River containerboard mill in Campti, Louisiana. Business segment operating profit (loss) includes an insurance reimbursement related to the Ixtac, Mexico box plant fire of $30 million in the first quarter of 2025 and $13 million in the fourth quarter of 2024.
Packaging Solutions EMEA business segment operating profit (loss) in the first quarter of 2025 was $46 million compared with $19 million in the fourth quarter of 2024. The first quarter of 2025 includes net sales of $1.2 billion and business segment operating profit (loss) of $13 million for the DS Smith EMEA business. For legacy IP EMEA Packaging, net sales were lower driven by lower sales prices. Cost of products sold was impacted by higher energy costs offset by a one-time energy credit received in the first quarter of 2025. Selling and administrative expense was impacted by lower overhead costs.
Global Cellulose Fibers business segment operating profit (loss) in the first quarter of 2025 was $17 million compared with $(250) million in the fourth quarter of 2024. Net sales were lower, reflecting lower average sales prices for fluff pulp and lower volumes for commodity pulp, partially offset by higher average sales prices for commodity pulp. Cost of products sold was impacted by lower operating costs driven by improved mill reliability, higher planned outage costs and higher energy costs. Selling and administrative expense was impacted by lower employee incentive compensation and medical benefit costs. Business segment operating profit was impacted by $215 million of accelerated depreciation expense in the fourth quarter of 2024 associated with the previously announced closure of the Georgetown, South Carolina pulp mill.
Cash used for operations during the first quarter of 2025 primarily reflects the timing of our annual incentive compensation payout and the payment of transaction costs associated with the closing of the DS Smith acquisition and other transformation related costs for a total impact of approximately $670 million. Additionally, first quarter of 2025 free cash flow reflects increased capital spending in line with our capital spending plan for 2025. The Company generated meaningful cash receipts outside of free cash flow through the sale of certain assets along with the receipt of insurance recoveries related to the Ixtac, Mexico box plant fire.
International Paper (NYSE: IP; LSE: IPC) is the global leader in sustainable packaging solutions. With company headquarters in Memphis, Tennessee, USA, and EMEA (Europe, Middle East and Africa) headquarters in London, UK, IP employs more than 65,000 team members and serves customers around the world with operations in more than 30 countries.
SOURCE: International Paper