International Paper Q3 sales miss on softer demand

Overview

• U.S. packaging solutions firm's Q3 net sales declined and missed analyst expectations

• Adjusted operating EPS turned positive from a loss in prior year period

• Company recorded $1.38 bln non-cash goodwill impairment for EMEA segment, driving net loss

Outlook

• International Paper sees Q4 Packaging Solutions North America operating profit of $460-$500 mln

• Company expects full-year 2026 Packaging Solutions North America operating profit of $1.3-$1.4 bln

• International Paper will no longer provide Packaging Solutions EMEA financial guidance due to planned separation

Result Drivers

• NORTH AMERICA PRICING - Higher sales prices in North America supported segment revenue, though partially offset by lower sales volumes due to softer demand

• COST MANAGEMENT - Lower planned maintenance outage costs and improved mill performance reduced operating costs in North America, while higher input and freight costs partly offset these gains

• EMEA IMPAIRMENT & SOFT DEMAND - EMEA segment results were affected by a $1.38 bln goodwill impairment and continued weak demand, with higher paper prices not yet reflected in box pricing

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 2 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the paper packaging peer group is "buy"

• Wall Street's median 12-month price target for International Paper Co is $43.00, about 28.8% above its October 27 closing price of $33.38

• The stock recently traded at 12 times the next 12-month earnings vs. a P/E of 19 three months ago

Reuters Recommended Reads

• Oct 28 - Smurfit Westrock Q3 net income falls on cost inflation

• Oct 26 - Clearwater Paper Q3 revenue slightly misses estimates on lower market pricing

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)