International Paper Co (NYSE:IP) Reports Q3 2025 Earnings Miss, Driven by Strategic Charges

International Paper Co (NYSE:IP) reported third-quarter 2025 financial results that fell significantly short of analyst expectations, triggering a negative pre-market reaction. The company's performance was heavily impacted by substantial strategic charges, painting a complex picture of operational challenges amidst a transformative period.

Earnings and Revenue Performance

The company's top and bottom-line results for the quarter ending September 2025 missed consensus estimates by considerable margins. While International Paper recorded $6.2 billion in net sales, this figure came in below what market observers had projected for the period.

• Reported Revenue: $6.22 billion
• Estimated Revenue: $6.69 billion
• Reported Adjusted EPS: -$0.43
• Estimated EPS: $0.48

The discrepancy between the reported GAAP figures and the adjusted non-GAAP numbers was substantial. The company highlighted a $675 million charge for accelerated depreciation linked to its mill closures and "80/20 strategic actions," which was a primary driver behind the reported losses from continuing operations.

Market Reaction and Recent Performance

The immediate market response to the earnings release was negative, reflecting investor disappointment with the results. In pre-market trading, the stock declined approximately 2.4%, indicating a clear reassessment of the company's near-term value based on the quarterly data. This short-term reaction adds to a pattern of recent weakness.

• Pre-Market Performance: -2.4%
• Last Week's Performance: -7.8%
• Last Month's Performance: -4.4%

The persistent negative trend over the past month suggests that market sentiment was already cautious leading into the earnings announcement, with the results likely confirming existing concerns about the company's performance.

Strategic Context and Forward Outlook

The earnings press release emphasized that the quarter's results were significantly affected by the company's ongoing strategic restructuring. The $675 million charge, while damaging to quarterly profitability, is presented as part of a broader effort to streamline operations and improve future efficiency. The company's "80/20 strategic actions" appear to be a central pillar of this effort, though the specifics of how these mill closures and operational shifts will translate to future profitability were not detailed in the provided context. Looking ahead, analyst estimates for the full year 2025 project sales of approximately $26.21 billion. For the upcoming fourth quarter, the market is anticipating a rebound, with consensus estimates pointing to:

• Q4 2025 Estimated Revenue: $6.59 billion
• Q4 2025 Estimated EPS: $0.62

The absence of formal financial guidance from International Paper in the press release means investors are left to weigh the company's strategic narrative against these independent analyst projections. The market will be watching closely to see if the cost-saving and operational benefits from the current restructuring can help the company meet or exceed these future estimates.

Conclusion

International Paper's third quarter was defined by a significant earnings miss driven largely by one-time strategic charges. While the company frames these costs as investments in a more efficient future, the market's immediate reaction has been punitive. The key challenge for International Paper will be to demonstrate in subsequent quarters that its strategic shifts can generate the operational improvements necessary to align its financial performance with market expectations.

For a detailed breakdown of historical earnings and future analyst estimates, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.