The 5 Most Interesting Analyst Questions From International Paper's Q1 Earnings Call

Yahoo

25-06-2025

International Paper's first quarter results were met with a negative market reaction, as the company's sales growth was offset by earnings that came in well below Wall Street expectations. Management attributed the quarter's performance to the addition of the DS Smith business, price increases in North America, and early benefits from transformation efforts, but also acknowledged a challenging demand environment and the impact of non-recurring items. CEO Andy Silvernail described the period as 'a relatively low quality number in the first quarter,' pointing to softer-than-anticipated market demand and ongoing economic uncertainty.
Is now the time to buy IP? Find out in our full research report (it's free).
Revenue: $5.9 billion vs analyst estimates of $5.99 billion (27.8% year-on-year growth, 1.5% miss)
Adjusted EPS: $0.23 vs analyst expectations of $0.37 (38% miss)
Operating Margin: -0.6%, down from 2.7% in the same quarter last year
Market Capitalization: $24.59 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.
Phil Ng (Jefferies) asked about the demand assumptions behind full-year EBITDA targets and how order patterns are shaping up. CEO Andy Silvernail said stable demand would support targets but any further weakness would require additional cost actions.
Ng (Jefferies) also questioned potential tariff impacts on the pulp and containerboard businesses. Silvernail explained that direct tariff exposure is limited, with most risk coming from second-order effects on demand and price.
Mike Roxland (Truist Securities) asked for more detail on share gains among local customers and the impact of service improvements. Silvernail credited targeted investments, hiring, and higher service levels for progress, especially with mid-sized accounts.
Mark Weintraub (Seaport Research Partners) inquired about the earnings ramp from first to second half and whether price realization in North America and Europe is fully reflected. Silvernail confirmed that first price hikes are included, while a second round in Europe is not yet certain due to market softness.
George Staphos (Bank of America) probed whether focusing on value over volume could put volume recovery at risk in a weaker environment. Silvernail responded that the current strategy balances margin and volume, with flexibility to accelerate cost actions if needed.
In the coming quarters, the StockStory team will monitor (1) the pace and effectiveness of DS Smith integration and synergy capture, (2) progress in cost-out initiatives and mill optimization, and (3) realization of price increases in both North America and Europe. Additional attention will be paid to signs of demand stabilization or further volatility, as well as ongoing strategic options for the Global Cellulose Fiber business.
International Paper currently trades at $46.59, down from $47.61 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free).
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