International Paper’s fourth quarter was marked by significant operational and strategic shifts as the company announced a plan to separate its North American and EMEA packaging divisions into two independent public entities. Despite revenue surpassing Wall Street expectations, the market responded negatively due to a substantial non-GAAP loss and sharply compressed margins. CEO Andrew K. Silvernail attributed these results to ongoing transformation initiatives, including cost optimization, site closures, and restructuring actions across both regions. Management acknowledged that while cost savings are being realized, near-term profitability was hampered by one-time transformation costs and continued investments in operational reliability.
Is now the time to buy IP? Find out in our full research report (it’s free for active Edge members).
International Paper (IP) Q4 CY2025 Highlights:
- Revenue: $6.01 billion vs analyst estimates of $5.89 billion (31.1% year-on-year growth, 1.9% beat)
- Adjusted EPS: -$0.08 vs analyst estimates of $0.25 (significant miss)
- Adjusted EBITDA: $758 million vs analyst estimates of $778 million (12.6% margin, 2.6% miss)
- Operating Margin: 0.9%, up from -1.6% in the same quarter last year
- Market Capitalization: $23.6 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From International Paper’s Q4 Earnings Call
- George Staphos (Bank of America) asked about free cash flow guidance assumptions and dividend coverage post-spin. CEO Andrew K. Silvernail confirmed no price increases are included in guidance and stated the dividend policy will be reviewed with shareholders following the separation.
- Mark Weintraub (Seaport Research Partners) questioned the timeline for completing the spin-off and the confidence in achieving a substantial second-half EBITDA step-up. Silvernail explained most cost actions have already been taken and emphasized granular tracking of savings and operational progress.
- Charlie Muir Sands (BNP Paribas) pressed for details on the quality of volume wins and their profitability. Silvernail responded that recent market share gains in North America were high quality and in line with pricing discipline, while EMEA wins avoided low-margin business.
- Philip Ng (Jefferies) inquired about incremental cost actions and commercial wins in North America and EMEA. CFO Lance T. Loeffler clarified that further cost benefits are planned for 2026 and volume outperformance is based on business already secured.
- Michael Roxland (Truist Securities) asked about persistent cost challenges in North America and whether these influenced the decision to spin off EMEA. Silvernail said the main driver for separation was the distinct value and structure of each region, not cost complexity alone.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will closely watch (1) progress on the separation process and the clarity of each region’s financial and operational targets, (2) the pace of cost-out realization and the normalization of restructuring expenses, and (3) evidence of sustained volume growth from customer wins and the impact of any price increases. Additional drivers include the successful integration of DS Smith assets and the effectiveness of the 8020 performance system in both regions.
International Paper currently trades at $44.83, up from $41.49 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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