01—Abstract
Summary
Summary of the 10-Q filed August 7, 2025. Cited figures are marked; the original filing is the authoritative source.
International Paper Company reported net earnings of $75 milliona ($0.14 per diluted share) for the second quarter of 2025, compared with a net loss of $(105) million in the first quarter of 2025 and net earnings of $498 million in the second quarter of 2024.
Net sales were $6.77 billionb in the quarter, up from $4.73 billion a year earlier, reflecting the acquisition of DS Smith, which closed on January 31, 2025. For the six months ended June 30, 2025, the company reported a net loss of $(30) million and net sales of $12.67 billion, compared with net earnings of $554 million and net sales of $9.35 billion in the prior-year period. Adjusted operating earnings were $105 million ($0.20 per diluted share) in the second quarter of 2025, compared with $193 million ($0.55 per diluted share) in the second quarter of 2024.
Cash flow and balance sheet changes were significant. Cash provided by operations was $188 millionc for the first six months of 2025, versus $760 million a year earlier, and free cash flow was $(564) million, as capital expenditures rose to $752 million. Total assets increased to $42.38 billion from $22.80 billion at December 31, 2024, and long-term debt rose to $9.69 billion from $5.37 billion.
The company sold five European box plants to Palm Group for €125 million, recording a net gain of $51 milliond, and is pursuing strategic options for its Global Cellulose Fibers business, with no assurance of a transaction. Management reports that tariffs and softer demand, particularly in EMEA, are weighing on industrial production and box demand, and a containerboard antitrust class action was filed on July 29, 2025, with its outcome not yet estimable.
02—Key points
Key Highlights
- Second-quarter 2025 net sales of $6.77 billion versus $4.73 billion in the second quarter of 2024, driven by the DS Smith acquisition.
- Second-quarter 2025 net earnings of $75 million ($0.14 per diluted share), compared with $498 million ($1.41 per diluted share) a year earlier and a first-quarter 2025 net loss of $(105) million.
- Adjusted operating earnings of $105 million ($0.20 per diluted share) in the second quarter of 2025, versus $193 million ($0.55 per diluted share) in the second quarter of 2024.
- Free cash flow of $(564) million for the first six months of 2025, compared with $311 million in the first six months of 2024, as capital expenditures reached $752 million.
- Total debt-related balances increased, with long-term debt of $9.69 billion at June 30, 2025, versus $5.37 billion at December 31, 2024, following the DS Smith transaction and new borrowings.
- Goodwill of $7.53 billion and intangibles of $4.41 billion at June 30, 2025, reflecting the DS Smith purchase price allocation, which remains preliminary; the consideration was approximately $9.9 billion.
- Pursuit of strategic options for the Global Cellulose Fibers business, with no assurance of a transaction, and a restructuring charge of $39 million in the second quarter tied to the Red River mill closure and the 80/20 strategy.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2025, International Paper kept $0.01.
- Revenue$6.14B100.0%
- Cost of revenue−$4.42B72.0%
- Gross profit$1.72B28.0%
- Operating costs−$1.77B28.8%
- Operating income−$49.0M0.8%
- Interest, other & tax$124.0M2.0%
- Net income$75.0M1.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2025filed August 7, 2025Financial Statements
Q2 FY2025 against Q2 FY2024
| Line item | Q2 FY2025Q2 FY2024 | Change |
|---|---|---|
| Revenue | $6.14B$4.02B | +52.8% |
| Cost of Revenue | $4.42B$3.36B | +31.6% |
| Gross Profit | $1.72B$659.00M | +161.0% |
| SG&A Expenses | $525.00M$453.00M | +15.9% |
| Operating Income | -$49.00M$322.00M | −115.2% |
| Interest Expense | $143.00M$107.00M | +33.6% |
| Net Income | $75.00M$498.00M | −84.9% |
| EPS (Basic) | $0.14$1.43 | −90.2% |
| EPS (Diluted) | $0.14$1.41 | −90.1% |
| Shares Outstanding (Basic) | 527.90M347.30M | +52.0% |
| Shares Outstanding (Diluted) | 532.60M352.80M | +51.0% |
05—Questions
Frequently Asked Questions
How did the DS Smith acquisition affect International Paper's results in the second quarter of 2025?
The filing states that the second-quarter 2025 results include three months of DS Smith activity, compared with two months in the first quarter. Net sales were $6.77 billion, and the company issued about 178 million shares, with holders owning roughly 34.1% of outstanding share capital, for a total purchase consideration of approximately $9.9 billion.
Why did earnings decline compared with the second quarter of 2024?
Second-quarter 2024 net earnings of $498 million included a $338 million tax benefit related to an internal legal entity restructuring. Second-quarter 2025 net earnings were $75 million, with higher depreciation and amortization of $480 million versus $261 million, higher interest expense of $107 million versus $55 million, and net special items of $35 million, including DS Smith combination costs of $32 million.
What is the company's cash flow position?
Cash provided by operations was $188 million for the first six months of 2025 versus $760 million a year earlier. The filing attributes the decline mainly to significant first-quarter payments of about $670 million, including $240 million of DS Smith transaction costs and $80 million of severance payments. Capital expenditures for full-year 2025 are expected to be $1.8 billion to $1.9 billion.
What legal and strategic matters could affect investors?
On July 29, 2025, 12 containerboard producers, including International Paper, were named in a purported class action alleging price-fixing under the Sherman Act, with an unspecified amount of treble damages sought. The company is also pursuing strategic options for its Global Cellulose Fibers business, and states there is no assurance this will result in any transaction.
How is the company's liquidity and debt position?
At June 30, 2025, the company had no borrowings outstanding under its $1.4 billion credit agreement or its commercial paper program, and it stated it was in compliance with its debt covenants. The fair value of its $9.9 billion of debt was approximately $9.6 billion, and it held long-term credit ratings of BBB (stable outlook) from S&P and Baa2 (stable outlook) from Moody's.
06—Continue