Core Insights - International Paper reported revenue of $4.58 billion for the quarter ended December 2024, a decrease of 0.5% year-over-year [1] - The company's EPS was -$0.02, a significant drop from $0.41 in the same quarter last year [1] - Revenue fell short of the Zacks Consensus Estimate of $4.72 billion, resulting in a surprise of -3.03% [1] - The EPS exceeded expectations with a surprise of +71.43%, compared to the consensus estimate of -$0.07 [1] Financial Performance Metrics - Global Cellulose Fibers net sales were reported at $662 million, below the average estimate of $692.14 million, with a year-over-year increase of +0.9% [4] - Industrial Packaging net sales reached $3.87 billion, slightly below the average estimate of $3.95 billion, reflecting a year-over-year increase of +0.7% [4] - Corporate and Inter-segment net sales were $49 million, significantly lower than the average estimate of $73.90 million, marking a year-over-year decline of -52.4% [4] - Operating profit for Global Cellulose Fibers was reported at -$250 million, worse than the average estimate of -$161.83 million [4] - Operating profit for Industrial Packaging was $247 million, slightly below the average estimate of $255.11 million [4] Stock Performance - Shares of International Paper have returned +7.7% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - International Paper reported a quarterly loss of $0.02 per share, outperforming the Zacks Consensus Estimate of a loss of $0.07, and showing a significant decline from earnings of $0.41 per share a year ago, indicating a 71.43% earnings surprise [1] Financial Performance - The company posted revenues of $4.58 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 3.03%, and showing a slight decrease from year-ago revenues of $4.6 billion [2] - Over the last four quarters, International Paper has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - International Paper shares have increased approximately 7.7% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.44 on revenues of $4.77 billion, and for the current fiscal year, it is $3.03 on revenues of $19.66 billion [7] - The estimate revisions trend for International Paper is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6] Industry Context - The Paper and Related Products industry is currently ranked in the top 15% of over 250 Zacks industries, indicating a strong outlook for stocks within this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - International Paper, a leader in sustainable packaging solutions, is set to hold an Investor Day on March 25, 2025, in New York City, featuring presentations from its CEO and executive management [1]. Company Overview - International Paper is a global producer of sustainable packaging, pulp, and other fiber-based products, and is one of the largest recyclers in the world [3]. - The company is headquartered in Memphis, Tennessee, and employs approximately 37,000 people globally [3]. - In 2024, International Paper reported net sales of $18.6 billion [3]. - The company serves customers worldwide with manufacturing operations in North America, Europe, North Africa, and Latin America [3]. Event Details - The Investor Day will include live audio webcasts and presentation slides available on the company's investor relations website [2]. - For those unable to attend in person, an archived copy of the webcast will be accessible within 24 hours after the event [2].

Financial Performance - International Paper reported full-year 2024 net earnings of $557 million, or $1.57 per diluted share, compared to $288 million, or $0.82 per diluted share in 2023[2]. - Full-year net sales for 2024 were $18.6 billion, a decrease from $18.9 billion in 2023, while fourth quarter net sales were $4.6 billion, consistent with the same period in 2023[2][6]. - The fourth quarter of 2024 saw a net loss of $147 million, or $0.42 per diluted share, compared to a loss of $284 million, or $0.82 per diluted share in the fourth quarter of 2023[2][6]. - Adjusted operating earnings for the full year 2024 were $400 million, or $1.13 per diluted share, down from $438 million, or $1.25 per diluted share in 2023[2][6]. - Net sales for Q4 2024 were $4,580 million, a slight decrease of 0.5% from $4,601 million in Q3 2024 and a decrease of 1.9% from $4,686 million in Q4 2023[22]. - Net loss for Q4 2024 was $147 million, compared to a net loss of $284 million in Q3 2024 and a net income of $150 million in Q4 2023[22]. - Basic earnings per share from continuing operations for Q4 2024 was $(0.42), an improvement from $(0.82) in Q3 2024 and an increase from $0.43 in Q4 2023[22]. - Adjusted Operating Earnings for the twelve months ended December 31, 2024, were $400 million, a decrease from $438 million in 2023[25]. - The diluted earnings per share for continuing operations was $(0.42) for the three months ended December 31, 2024, compared to $(0.82) for the same period in 2023[25]. Segment Performance - The Industrial Packaging segment reported a fourth quarter operating profit of $247 million, an improvement from a loss of $32 million in the same quarter of 2023[9]. - The Global Cellulose Fibers segment experienced a significant operating loss of $250 million in the fourth quarter of 2024, compared to a profit of $40 million in the third quarter of 2024[10]. Cash Flow and Investments - Free cash flow for the full year 2024 was $757 million, an increase from $692 million in 2023[6]. - Cash provided by operating activities for the twelve months ended December 31, 2024, was $1,678 million, down from $1,833 million in 2023[34]. - The company invested $921 million in capital projects during the twelve months ended December 31, 2024, down from $1,141 million in 2023[32]. Charges and Restructuring - The company incurred a pre-tax charge of $395 million for accelerated depreciation and restructuring, including $334 million related to the closure of the Georgetown, S.C. pulp mill[3]. - Net special items in the fourth quarter of 2024 amounted to a net after-tax charge of $146 million, compared to a charge of $12 million in the third quarter of 2024[11]. - Restructuring charges for Q4 2024 amounted to $162 million, compared to $99 million in Q3 2024 and $221 million for the full year 2024[22]. - The company reported a restructuring charge of $221 million for the twelve months ended December 31, 2024, compared to $99 million in 2023[32]. Balance Sheet - Total assets decreased to $22,800 million as of December 31, 2024, from $23,261 million as of December 31, 2023[30]. - Current liabilities increased to $4,308 million as of December 31, 2024, compared to $3,959 million as of December 31, 2023[30]. - The company’s total equity decreased to $8,173 million as of December 31, 2024, from $8,355 million as of December 31, 2023[30]. Future Outlook - The company plans to optimize and invest in its box plant system and explore strategic options for its Global Cellulose Fibers business in 2025[3]. - The company expects to close its proposed business combination with DS Smith Plc on January 31, 2025, which is anticipated to enhance its scale and global presence[19]. Economic Challenges - The company faced challenges due to macroeconomic conditions, including inflationary pressures and supply chain disruptions[19].

Core Insights - International Paper reported full-year 2024 net earnings of $557 million, or $1.57 per diluted share, with adjusted operating earnings of $400 million, or $1.13 per diluted share, compared to $18.6 billion in net sales for 2024, down from $18.9 billion in 2023 [1][15] - The fourth quarter of 2024 saw a net loss of $147 million, or $0.42 per diluted share, with adjusted operating loss of $7 million, or $0.02 per diluted share, and net sales of $4.6 billion, consistent with the same quarter in 2023 [1][5] Financial Performance - Full-year net sales were $18.6 billion in 2024, a decrease from $18.9 billion in 2023 [1] - Fourth quarter net sales were $4.6 billion in both 2024 and 2023 [1][5] - The company incurred a pre-tax charge of $395 million for accelerated depreciation and restructuring charges, including $334 million related to the closure of the Georgetown, S.C. pulp mill [2] Business Strategy - The company initiated a strategy for profitable growth as a low-cost, reliable, and innovative sustainable packaging solutions provider, focusing on restructuring and reducing costs [3] - Plans for 2025 include further cost reductions and balancing capacity with demand, alongside optimizing and investing in the box plant system [3] Segment Performance - In the fourth quarter of 2024, the Industrial Packaging segment reported net sales of $3.869 billion, while the Global Cellulose Fibers segment reported $662 million [9] - The Industrial Packaging segment's operating profit was $247 million, an improvement from a loss of $32 million in the previous quarter [9][10] - The Global Cellulose Fibers segment experienced an operating loss of $250 million, significantly impacted by lower sales prices and volumes [10] Special Items and Adjustments - Net special items in the fourth quarter of 2024 amounted to a net after-tax charge of $146 million, compared to $12 million in the third quarter of 2024 [11] - Adjusted operating earnings for the fourth quarter of 2024 were a loss of $7 million, while the full-year adjusted operating earnings were $400 million [23] Cash Flow and Liquidity - Cash provided by operations for the full year was $1.678 billion, down from $1.833 billion in 2023 [29] - Free cash flow for 2024 was $757 million, an increase from $692 million in 2023 [33]

Core Viewpoint - International Paper Company (IP) is set to report its fourth-quarter 2024 results on January 30, with expectations of revenue growth but a significant decline in earnings year-over-year [1][2]. Revenue and Earnings Estimates - The Zacks Consensus Estimate for IP's fourth-quarter revenues is $4.72 billion, reflecting a 2.7% increase from the previous year [2]. - The consensus estimate for earnings is six cents per share, indicating a substantial year-over-year decline of 85.4% [2]. Earnings Surprise History - International Paper has beaten the Zacks Consensus Estimates in three of the last four quarters, with an average surprise of 28.83% [4]. - The company has an Earnings ESP of 0.00% and a Zacks Rank of 1 (Strong Buy) [6]. Factors Influencing Q4 Performance - Demand has picked up in 2024 after a period of softness in 2023, particularly in the e-commerce channel [7]. - Volumes are expected to decline due to two fewer shipping days, but this may be offset by higher prices and favorable input costs [8]. Segment Performance - The Industrial Packaging segment is projected to see a 4.2% year-over-year drop in volumes, with specific declines in corrugating packaging (5.8%) and containerboard (1.6%) [9]. - Average realized pricing for the Industrial Packaging segment is expected to increase by 6.7% year-over-year, leading to projected revenues of $3.93 billion, a 2.2% growth [10]. - The Global Cellulose Fibers segment is anticipated to report a 4.1% decline in volumes but an 8.4% increase in revenues to $711 million, driven by higher prices [12]. Operating Profit Projections - The Industrial Packaging segment's operating profit is expected to decline by 20% to $252 million due to higher seasonal costs and increased depreciation from facility closures [11]. - The Global Cellulose Fibers segment is projected to report an operating loss of $235 million, significantly wider than the previous year's loss of $58 million [13]. Stock Performance - International Paper's shares have increased by 55.7% over the past year, outperforming the industry growth of 46.1% [14].

Company Announcement - International Paper has appointed Joy Roman as Senior Vice President, Chief People and Strategy Officer, effective February 1, 2025 [1] - Joy Roman will lead talent development, organizational effectiveness, and corporate strategy, while also overseeing Sustainability and Communications functions [1] - Roman brings extensive experience in human resources and strategy, having previously served as Chief People & Strategy Officer at Berry Global and holding leadership roles at 3M, Toll Brothers, and the De Beers Group [2] Executive Background - Joy Roman holds an MBA from the Yale School of Management and a bachelor's degree in English and communications from the University of Wisconsin [2] - Roman began her career as a management consultant at McKinsey & Company [2] Company Overview - International Paper is a global producer of sustainable packaging, pulp, and fiber-based products, and one of the world's largest recyclers [3] - The company employs approximately 39,000 colleagues globally and operates manufacturing facilities in North America, Europe, Latin America, and Africa [3] - International Paper reported net sales of $18.9 billion in 2023 [3]

Core Viewpoint - International Paper (IP) has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - International Paper is projected to earn $1.18 per share for the fiscal year ending December 2024, reflecting a year-over-year decline of 45.4% [8]. - Over the past three months, the Zacks Consensus Estimate for International Paper has increased by 10.4%, indicating a positive trend in earnings outlook [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Only the top 5% of Zacks-covered stocks receive a 'Strong Buy' rating, highlighting the superior earnings estimate revision feature of these stocks [9][10]. - The upgrade of International Paper to Zacks Rank 1 positions it among the top 5% of stocks, suggesting potential for higher stock prices in the near term [10].

Industry Overview - The Zacks Paper and Related Products industry benefits from rising e-commerce activities and sustained demand from consumer-oriented sectors like food, beverages, and healthcare [1] - The industry is highly diversified, producing graphic paper, packaging paper, and absorbent hygiene products, catering to sectors such as e-commerce, retail, and healthcare [3] - The industry is positioned to capitalize on the growing consumer preference for environmentally friendly packaging solutions [1] Key Trends - E-commerce is driving packaging demand, with e-commerce accounting for over 19% of global retail sales in 2023, projected to reach 25% by 2027 [4] - Global e-commerce revenues are expected to reach $4,791 billion by 2025, with a CAGR of 7.83% from 2025 to 2029 [4] - Increased M&A activities are transforming the industry, with notable mergers like Smurfit Westrock and International Paper's acquisition of DS Smith [5] - Sustainability is a key driver, with the industry incorporating recycled content and investing in eco-friendly production methods [6] - Rising costs of transportation, chemicals, and fuel are being offset through pricing actions, cost reduction, and automation [7] Industry Performance - The Paper and Related Products industry has outperformed the S&P 500 and the Basic Materials sector, with a 42.5% gain over the past year [11] - The industry's forward 12-month EV/EBITDA ratio is 9.24X, compared to the S&P 500's 13.96X and the Basic Materials sector's 6.64X [13] - Over the last five years, the industry's EV/EBITDA ratio has ranged between 7.82X and 16.26X, with a median of 10.33X [15] Key Companies - Suzano has inaugurated the world's largest single-line pulp mill, increasing its pulp production capacity by 24% to 13.5 million tons annually [16] - Suzano acquired industrial assets in Arkansas and North Carolina, positioning itself as a major supplier of paper for liquid packaging boards in North America [16] - Sylvamo's Project Horizon aims to save over $110 million in 2024 through operational improvements and cost reductions [19] - International Paper is optimizing its cost structure and investing in corrugated packaging, with its acquisition of DS Smith expected to generate $514 million in pre-tax cash synergies annually by the fourth year [22] - Klabin has seen a 6% year-over-year increase in sales volumes and is ramping up production with new paper machines, aiming to boost corrugated cardboard conversion capacity to 1.2 million tons annually [23] Earnings and Valuation - Suzano's 2025 earnings estimate has surged 39% in the past 60 days, indicating a year-over-year growth of 364% [17] - Sylvamo's 2024 earnings estimates have increased by 10.5%, with a year-over-year growth of 17.5% [20] - International Paper's 2025 earnings estimate has risen 3.4%, indicating a year-over-year growth of 156% [22] - Klabin's 2025 earnings estimate has increased by 15%, showing significant improvement from 2024 [24]

Core Viewpoint - International Paper (IP) is recognized as a strong buy with a focus on renewable fiber-based products, including packaging and paper items, indicating a positive outlook for the stock [1] Company Overview - International Paper Co. specializes in producing renewable fiber-based packaging and pulp products, operating through segments such as Industrial Packaging and Global Cellulose Fibers [2] - The company was founded in 1898 and is headquartered in Memphis, TN [2] Earnings History - The company has a solid earnings history, surpassing the Zacks Consensus Estimate in 3 of the last 4 quarters, with a recent earnings gain of 44 cents against a consensus of 24 cents, resulting in an 83% positive earnings surprise [4] - The average earnings surprise over the last four quarters is 28% [4] Earnings Estimates Revisions - Recent earnings estimate revisions show an increase for the next quarter from $0.42 to $0.44, while the full year 2024 estimate decreased from $1.42 to $1.18, and next year's estimate increased from $2.92 to $3.02 [5] Growth Projections - Revenue for 2024 is projected to be around $18.7 billion, reflecting a contraction of just under 1%, while 2025 is expected to see sales of $19.6 billion, indicating a growth of 4.7% [6] Valuation Metrics - The forward price-to-earnings (PE) ratio stands at 18.3x, which is considered high given the lack of growth in 2024, while the price-to-book ratio of 2.2x remains attractive for value-oriented investors [7] - The price-to-sales ratio is slightly above 1x, typical for commodity-based products [7] Margin Analysis - Operating margins are relatively thin, having decreased from 3.3% to 2.9% over the last two quarters, indicating a lack of competitive advantage [8]