International Paper stays the course despite demand, economic uncertainty

International Paper has reported its first quarter 2025 financial results, and despite much demand and economic uncertainty, the Memphis, Tennessee-based packaging company saw a year-over-year sales boost primarily thanks to its acquisition of DS Smith earlier this year.

IP’s first quarter net sales were $5.9 billion, up from $4.62 billion in the same period last year and up from $4.58 billion in the fourth quarter of 2024.

While the company posted a $105 million loss in net earnings for the quarter, it’s up from the $147 million loss in the fourth quarter of 2024. However, that loss is down from the first quarter of last year when IP posted net earnings of $56 million.

In an earnings call Wednesday, CEO Andy Silvernail was largely positive despite market challenges and said IP is on a “transformational journey” with plans to remain focused on its 80/20 strategy that targets its most valuable customers and aligns resources accordingly.

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“The external world is a little wild right now,” Silvernail said. “I’ve been involved in a lot of challenging moments, from 9/11 to the Great Recession to COVID. We’re going to stay focused on the strategy, tireless in our execution and resolute in building a great company.”

Since its acquisition of DS Smith, IP has reconfigured its business segments to include Packaging Solutions North America, Packaging Solutions EMEA and Global Cellulose Fibers.

The Packaging Solutions North America segment saw first-quarter net sales of $3.7 billion, up from $3.49 billion in the same period last year, while Packaging Solutions EMEA net sales were $1.55 billion, up from the $348 million in net sales last year before it acquired London-based DS Smith.

Meanwhile, net sales in IP’s Global Cellulose Fibers segment have slumped both quarterly and yearly. The segment saw $643 million in net sales in the first quarter of 2025 compared with $704 million in the first quarter of 2024 and $662 million in the fourth quarter of last year.

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During IP’s Investor Day event in late March, the company noted a tick down in demand as the tariff situation developed in the U.S., and since that situation escalated shortly after, Silvernail said IP saw another negative shift in demand.

“At current demand levels, we can deliver for the year,” Silvernail said. “It’s impossible to predict the next few months as much as being driven outside of normal market forces. Regardless, we will remain vigilant and work to accelerate our strategy if demand falters further. This is a self-help story.”

According to Silvernail, industry demand in North America was down 2 percent in the first quarter, and based on IP’s order patterns, he expects that level of demand to continue into the second quarter.

In Europe, first-quarter demand was soft, as expected, and Silvernail expects those markets to remain stable in the second quarter and on a quarter-by-quarter basis.

In both North America and Europe, Silvernail said demand has been stable in April, but that IP is “very cautious” about the outlook given strong negative consumer and business sentiment, and give the uncertainty and volatility, he noted the company is prepared for three scenarios.

“If the demand environment remains stable going forward, I’m confident we remain on track to deliver the targeted range of earnings improvements,” he said. “If we see meaningful deterioration in the economic environment, it’s likely we’d fall below our range. We would take appropriate countermeasures to ensure we remain highly competitive while funding our strategy and our dividend.

“Despite the uncertainty about the macro landscape, we are controlling the controllables with a focus on driving commercial wins and inefficiencies out. Regardless of the macro environment, our job is to win for our customers, create a great place to work and position IP for long-term profitable market share growth.”

International Paper’s full earnings presentation can be found online.