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Investing.com - International Paper (NYSE:IP) shares fell 5.1% on Thursday after the packaging company reported a significant third-quarter earnings miss, with results weighed down by substantial charges related to mill closures and strategic restructuring actions.
The company posted an adjusted loss of $0.43 per share for the third quarter, falling far short of analysts’ expectations for earnings of $0.55 per share. Revenue came in at $6.22 billion, below the consensus estimate of $6.46 billion.
The quarterly results included $675 million in accelerated depreciation charges associated with mill closures and strategic actions under the company’s "80/20" transformation plan. Despite these charges, International Paper reported adjusted EBITDA from continuing operations of $859 million.
"Our third quarter results reflect substantial progress on our transformation journey," said Chairman and CEO Andy Silvernail. "We delivered 28% sequential adjusted EBITDA improvement across both Packaging Solutions businesses, driven by price realization, cost management and lower fiber costs."
The company noted some positive signs in its North American business, with year-over-year box shipment growth in September, which management described as "a clear indicator that our customer-centric approach is closing the industry gap." However, demand remained soft across both North American and EMEA regions.
International Paper’s Packaging Solutions North America segment reported an operating loss of $166 million compared to a profit of $277 million in the second quarter, while Packaging Solutions EMEA posted an operating loss of $58 million versus a $1 million loss in the previous quarter.
Despite the challenging quarter, Silvernail expressed confidence in the company’s transformation plan: "We are accelerating actions and remain fully committed to executing our transformation plan — delivering commercial excellence, securing an advantaged cost position, and building a differentiated, sustainable global packaging company."
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