Latest news with #AndySilvernail
Yahoo
25-06-2025
- Business
- Yahoo
The 5 Most Interesting Analyst Questions From International Paper's Q1 Earnings Call
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). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error al recuperar los datos Inicia sesión para acceder a tu cartera de valores Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos Error al recuperar los datos
Yahoo
19-05-2025
- Business
- Yahoo
International Paper closes Texas plants, cuts 117 jobs
International Paper Co. recently said it was shuttering two Texas facilities and laying off 117 workers as it restructures its presence along the U.S.-Mexico border. The company is closing two production facilities in Edinburg, Texas, one that manufactures containers and another that makes paper sheets. The sheet plant will be converted into a warehouse. While the company is closing two production plants in Edinburg, it is investing more funds at a nearby facility in McAllen, Texas, as well as a plant across the border in Reynosa, Mexico, officials said. 'There are 117 positions impacted; however the expansion at McAllen will create 40 new hourly positions to be filled,' International Paper Co. said in an email to FreightWaves. 'The company will assist employees and customers through this transition.'However, according to a Worker Adjustment and Retraining Notification (WARN) Act notice filed on May 9 in Texas, International Paper will lay off a total of 132 workers in Edinburg, as well as five employees in McAllen. International Paper did not immediately respond to a request from FreightWaves for clarification on the number of employees being laid off in Texas. Memphis, Tennessee-based International Paper (NYSE: IP) is a global provider of paper and packaging solutions. It has more than 260 facilities in 30 countries and employs more than 65,000 workers.. The Reynosa operation will be moving to a more modern and capable facility that is currently under construction.'The decision to cease operations at our two Edinburg facilities while investing in McAllen and Reynosa allows us to focus our efforts, provide excellent customer experiences and maintain a competitive cost structure that we believe positions us for profitable growth,' Tom Hamic, International Paper's executive vice president and president of packaging solutions North America, said in a news release. Since October, International Paper has laid off over 2,500 employees and closed facilities in Arizona, Illinois, Pennsylvania, Louisiana, South Carolina, North Carolina, Missouri, Tennessee and Texas. During a first-quarter earnings call with analysts on April 30, International Paper CEO Andy Silvernail said demand for packaging and paper products declined across North America in recent months. 'Industry demand in North America was down 2% in the first quarter, and based on our order patterns, we expect that level of demand to continue into the second quarter,' Silvernail said. The post International Paper closes Texas plants, cuts 117 jobs appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
13-05-2025
- Business
- Yahoo
International Paper to restructure footprint along US-Mexico border
This story was originally published on Packaging Dive. To receive daily news and insights, subscribe to our free daily Packaging Dive newsletter. International Paper announced it will close two facilities as part of an effort to rework its footprint in the Rio Grande Valley along the United States-Mexico border. It will close a box plant and sheet plant in Edinburg, Texas. This will affect 117 employees, a spokesperson said via email. IP also plans to make investments in the region. It will convert the current Edinburg sheet plant into a warehouse and expand an existing facility in McAllen, Texas. The company's website classifies McAllen as a container plant. As a result of the investment, 40 new hourly positions will be created at McAllen, the spokesperson said. In addition, IP intends to shift its operations in Reynosa, Mexico, to a more modern facility under construction there. The company plans to assist both customers and employees affected by the closures and realignment. It aims to 'minimize the impact to affected employees through natural attrition, retirements and open positions at other IP facilities,' including open positions at the McAllen facility, according to a news release. "The decision to cease operations at our two Edinburg facilities while investing in McAllen and Reynosa allows us to focus our efforts, provide excellent customer experiences and maintain a competitive cost structure that we believe positions us for profitable growth," said Tom Hamic, executive vice president and president of packaging solutions North America, in a statement. Upon joining IP as CEO in May 2024, Andy Silvernail launched a streamlining strategy to return the company to profitability, which has resulted in numerous facility closures and at least 2,100 layoffs since autumn. In February, the company announced it would close four facilities in four states — including the Red River containerboard mill in Campti, Louisiana — collectively impacting 674 employees. Analysts have predicted for months that International Paper would continue its optimization into 2025, which would likely bring more facility closures, although they have not offered firm numbers. IP has not addressed exactly how many more closures and layoffs are expected this year. During the company's Q1 2025 earnings call last month, Silvernail said IP has undergone a 'step-change improvement' in performance due to the transformation strategy. He also described work to implement the same optimization plan in Europe following the January acquisition of London-based DS Smith. IP also is divesting five corrugated box plants in Europe, as required by the European Commission for approval of the DS Smith acquisition. Germany-based Palm Group offered to buy those plants, and the deal is expected to close in the second quarter. Maria Rachal contributed additional reporting to this story. Recommended Reading International Paper to close 4 facilities, affecting 674 employees Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
01-05-2025
- Business
- Yahoo
International Paper sees Q1 sales boost despite economic uncertainty
This story was originally published on Packaging Dive. To receive daily news and insights, subscribe to our free daily Packaging Dive newsletter. By the numbers: Q1 2025 Net sales: $5.9B Up 27.8% year over year Net sales packaging North America: $3.7B Up 6.2% year over year Net sales packaging EMEA: $1.66B Up 345.4% year over year, following DS Smith acquisition Net loss: $105M Compared with a net earnings of $56M in Q1 2024 M&A boost: International Paper's first quarter 2025 results showed higher sales and earnings, which it largely attributes to the January acquisition of London-based DS Smith. Still, both the North American and European packaging markets are showing demand weakness, said CEO Andy Silvernail on Tuesday's earnings call. Year in review: Silvernail reflected on the company's transition during his one year as IP's CEO, a position he assumed on May 1, 2024. He detailed the company's 'step-change improvement' in performance, including from the 80/20 optimization strategy he launched last year. Plus, cost reductions have helped, including numerous facility closures. 'Hopefully what you're seeing now is predictability and repeatability of the message because of the actions that we're taking to control our own destiny,' Silvernail said, reiterating the focus on 'controlling what we can control.' 80/20 progress: Executives updated progress on bringing the 80/20 strategy to DS Smith's European facilities, a move that executives announced in March during IP's investor day. By mid-summer, IP will have initiated 'the full ramp of initial 80/20 launches through every region in Europe,' Silvernail said, mentioning that he spent 10 weeks in Europe at the beginning of the year to 'get that off on the right foot.' He also highlighted the irrelevance of whether the company improvements are specifically coming from 80/20 measures or synergies. 'I don't care, right? We're talking about improvement and [getting] better, and the last thing we're going to do is get caught' up in who owns which impacts, he said. Economic uncertainty: IP shifted some of its expectations for the coming quarters, based on shaky conditions across the broader economy. While it originally anticipated a solid U.S. economy this year and improvements in Europe, the new projection is for softer industrial production driven by weaker consumer demand. It tamped down the previous prediction of 1% to 1.5% demand growth in North America to demand that is flat to down approximately 1.5% year over year. 'The external world is a little wild right now,' Silvernail said. 'If we see meaningful weakness from here, it's going to stretch us.' Outlook: If weakness continues, 'there are a handful of levers' IP will pull, Silvernail said, such as accelerating its cost reduction strategy and reevaluating production capacity. Despite the weaker box demand, International Paper still expects to fall within its targeted range for 2025 earnings of $3.5 billion to $4 billion in adjusted earnings before interest, taxes, depreciation and amortization. So far in April, the company has seen demand stabilize compared with where it was in February and March, Silvernail said. 'We just don't know where the market is going to be, given the chaos that's been out there,' he said. 'We will accelerate and pivot based on what the market gives us, with an eye towards our long-term strategy.' Recommended Reading International Paper details new box plant as part of turnaround strategy
Yahoo
30-04-2025
- Business
- Yahoo
International Paper (NYSE:IP) Misses Q1 Sales Targets
Packaging and materials company International Paper (NYSE:IP) fell short of the market's revenue expectations in Q1 CY2025, but sales rose 27.8% year on year to $5.90 billion. Its non-GAAP profit of $0.23 per share was 38% below analysts' consensus estimates. Is now the time to buy International Paper? Find out in our full research report. Revenue: $5.90 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) Free Cash Flow was -$618 million, down from $144 million in the same quarter last year Market Capitalization: $25.14 billion "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. Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications. A company's long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. International Paper's demand was weak over the last five years as its sales fell at a 2.1% annual rate. This was below our standards and is a sign of poor business quality. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. International Paper's annualized revenue declines of 2.5% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk. International Paper isn't alone in its struggles as the Industrial Packaging industry experienced a cyclical downturn, with many similar businesses observing lower sales at this time. This quarter, International Paper generated an excellent 27.8% year-on-year revenue growth rate, but its $5.90 billion of revenue fell short of Wall Street's high expectations. Looking ahead, sell-side analysts expect revenue to grow 30.9% over the next 12 months, an improvement versus the last two years. This projection is eye-popping for a company of its scale and implies its newer products and services will catalyze better top-line performance. Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend. Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals. International Paper was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.3% was weak for an industrials business. Analyzing the trend in its profitability, International Paper's operating margin decreased by 5.8 percentage points over the last five years. We've noticed many Industrial Packaging companies also saw their margins fall (along with revenue, as mentioned above) because the cycle turned in the wrong direction, but International Paper's performance was poor no matter how you look at it. It shows that costs were rising and it couldn't pass them onto its customers. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Sadly for International Paper, its EPS declined by 21.1% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand. Diving into the nuances of International Paper's earnings can give us a better understanding of its performance. As we mentioned earlier, International Paper's operating margin declined by 5.8 percentage points over the last five years. Its share count also grew by 11.5%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For International Paper, its two-year annual EPS declines of 42.8% show it's continued to underperform. These results were bad no matter how you slice the data. In Q1, International Paper reported EPS at $0.23, up from $0.18 in the same quarter last year. Despite growing year on year, this print missed analysts' estimates. We also like to analyze expected EPS growth based on Wall Street analysts' consensus projections, but there is insufficient data. We struggled to find many positives in these results. Its EPS missed significantly and its revenue fell slightly short of Wall Street's estimates. Overall, this was a softer quarter. The stock traded down 2.5% to $46.43 immediately following the results. International Paper's earnings report left more to be desired. Let's look forward to see if this quarter has created an opportunity to buy the stock. When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free. Sign in to access your portfolio
