What Happened?
Shares of packaging and materials company International Paper (NYSE: IP) fell 10.7% in the morning session after the company reported disappointing third-quarter 2025 results that missed analyst expectations on both revenue and profit.
The packaging firm announced revenue of $6.22 billion, falling short of the $6.48 billion consensus forecast. More significantly, International Paper posted an adjusted loss of $0.43 per share, a stark reversal from the $0.56 per share profit that analysts had predicted. The company's profitability took a major hit, with its operating margin swinging to a negative 10.8% from a positive 3.7% in the same quarter last year. This decline was driven by operating expenses growing faster than revenue, signaling a lack of cost control and leading to the sharp investor sell-off.
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What Is The Market Telling Us
International Paper’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. But moves this big are rare even for International Paper and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 24 days ago when the stock dropped 3.5% on the news that Seaport Global Securities downgraded the stock to Neutral from Buy, citing valuation concerns. The research firm expressed that the company's profit improvement timeline increasingly depended on 2027 results, with less of a positive influence expected in 2026. Seaport Global also noted that International Paper's strategic actions were becoming more dependent on its European operations, which could be complicated. Analyst Mark Weintraub pointed to several risks, many of which were macro-related and outside of management's control. Due to the stock's relative valuation, the firm suggested investors might find better value in other investments.
International Paper is down 27.9% since the beginning of the year, and at $38.31 per share, it is trading 36.2% below its 52-week high of $60.09 from January 2025. Investors who bought $1,000 worth of International Paper’s shares 5 years ago would now be looking at an investment worth $875.66.
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