01—Abstract
Summary
Summary of the 10-Q filed November 6, 2025. Cited figures are marked; the original filing is the authoritative source.
International Paper Company reported a third-quarter 2025 net loss of $1.10 billiona, or $(2.09) per diluted share, compared with net earnings of $150 million in the third quarter of 2024.
The loss reflects $1.0 billionb of net pre-tax impairment on the Global Cellulose Fibers business, which is now presented as discontinued operations, and $675 million of accelerated depreciation tied to mill closures. Loss from continuing operations was $(426) million, or $(0.81) per diluted share, versus $111 million, or $0.31 per diluted share, a year earlier. Net sales rose to $6.22 billion from $3.98 billion, primarily reflecting the DS Smith acquisition completed January 31, 2025, which contributed $2.2 billion of third-quarter net sales.
Management reported Adjusted operating earnings (loss) of $(224) million, or $(0.43) per diluted share, and, beginning in the third quarter, introduced Adjusted EBITDA from continuing operations of $859 millionc, a 28% sequential increase. Management attributed the sequential improvement to price realization, cost management and lower fiber costs. For the fourth quarter, the company expects lower Adjusted EBITDA in PS NA on lower volumes and three fewer shipping days, and higher Adjusted EBITDA in PS EMEA.
Cash flow is under pressure: cash provided by operations was $793 milliond for the first nine months of 2025 versus $1.28 billion a year earlier, and free cash flow was $(414) million, against $620 million in the prior-year period. Capital expenditures were $1.21 billion, with full-year 2025 capital expenditures expected at $1.8 billion to $1.9 billion.
Total debt rose to about $9.96 billion, and the company reported that it was in compliance with its debt covenants and held BBB (stable) and Baa2 (stable) ratings from S&P and Moody's. The pending sale of the Global Cellulose Fibers business to American Industrial Partners for $1.5 billion, subject to closing adjustments, is expected to close by year-end 2025, subject to regulatory approvals.
02—Key points
Key Highlights
- Net loss of $1.10 billion ($(2.09) per diluted share) in Q3 2025, versus net earnings of $150 million in Q3 2024, driven by a $1.0 billion pre-tax impairment on the Global Cellulose Fibers business within discontinued operations.
- Loss from continuing operations of $(426) million ($(0.81) per diluted share) in Q3 2025; Adjusted operating earnings (loss) were $(224) million ($(0.43) per diluted share).
- Adjusted EBITDA from continuing operations of $859 million in Q3 2025, a 28% sequential increase, which management now uses as its guidance basis alongside Adjusted operating earnings.
- Net sales of $6.22 billion in Q3 2025 versus $3.98 billion in Q3 2024, with DS Smith contributing $2.2 billion; PS NA segment operating loss of $(166) million and PS EMEA segment operating loss of $(58) million.
- Free cash flow of $(414) million for the first nine months of 2025 versus $620 million a year earlier, as cash from operations fell to $793 million and capital expenditures rose to $1.21 billion.
- Global Cellulose Fibers sale to American Industrial Partners for $1.5 billion, including $190 million of preferred stock, is expected to close by year-end 2025 subject to regulatory approvals; the FTC granted early termination of the HSR waiting period on September 24, 2025.
- Mill closures at Riceboro and Savannah, Georgia, and Belisce, Croatia, reduce containerboard capacity by approximately 1.7 million tons, with combined pre-tax charges of approximately $840 million, including approximately $600 million of accelerated depreciation.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q3 FY2025, International Paper lost $0.18.
- Revenue$6.22B100.0%
- Cost of revenue−$4.29B68.9%
- Gross profit$1.94B31.1%
- Operating costs−$2.41B38.7%
- Operating income−$475.0M7.6%
- Interest, other & tax−$627.0M10.1%
- Net income−$1.10B17.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2025filed November 6, 2025Financial Statements
Q3 FY2025 against Q3 FY2024
| Line item | Q3 FY2025Q3 FY2024 | Change |
|---|---|---|
| Revenue | $6.22B$3.98B | +56.4% |
| Cost of Revenue | $4.29B$2.88B | +48.9% |
| Gross Profit | $1.94B$1.10B | +76.1% |
| SG&A Expenses | $493.00M$473.00M | +4.2% |
| Operating Income | -$475.00M$237.00M | −300.4% |
| Interest Expense | $135.00M$107.00M | +26.2% |
| Net Income | -$1.10B$150.00M | −834.7% |
| EPS (Basic) | $-2.09$0.43 | −586.0% |
| EPS (Diluted) | $-2.09$0.42 | −597.6% |
| Shares Outstanding (Basic) | 528.00M347.40M | +52.0% |
| Shares Outstanding (Diluted) | 528.00M353.40M | +49.4% |
05—Questions
Frequently Asked Questions
Why was the reported net loss so large in the third quarter of 2025?
The net loss of $1.10 billion was driven primarily by a net pre-tax impairment of $1.0 billion on the Global Cellulose Fibers business, recorded within discontinued operations, and $675 million of accelerated depreciation tied to mill and plant closures in the quarter. Management noted that the impairment is based on estimated proceeds and is subject to change with final proceeds and closing adjustments.
What do management's adjusted measures show about underlying performance?
Adjusted operating earnings (loss) were $(224) million, or $(0.43) per diluted share, in Q3 2025, compared with $94 million in Q2 2025 and $113 million in Q3 2024. Adjusted EBITDA from continuing operations was $859 million, up from $670 million in Q2 2025. Management attributes the sequential improvement to price realization, cost management and lower fiber costs.
What is the outlook for the fourth quarter of 2025?
Management expects lower Adjusted EBITDA from continuing operations in PS NA, citing lower volumes, the commercial impact of recent mill closures and three fewer shipping days, partly offset by cost-out benefits and strategic wins. For PS EMEA, management expects higher Adjusted EBITDA driven by prior index price realization, seasonally higher volumes and lower fiber costs.
How is the company's liquidity and debt position?
Cash and temporary investments were $995 million at September 30, 2025. The company reported $9.9 billion of debt with an estimated fair value of about $9.7 billion, and total debt on the balance sheet included $972 million of current maturities and $8.99 billion of long-term debt. The company had no borrowings under its commercial paper program or its $1.4 billion credit agreement, was in compliance with its debt covenants, and held BBB (stable) and Baa2 (stable) credit ratings from S&P and Moody's.
What does the Global Cellulose Fibers sale mean for the company?
The company agreed on August 21, 2025 to sell the Global Cellulose Fibers business to American Industrial Partners for $1.5 billion, subject to closing adjustments, including $190 million of preferred stock. The company intends to use proceeds for strategic reinvestment in packaging, targeted debt reduction and maintaining an investment-grade rating. The closing is expected by year-end 2025, subject to regulatory approvals, and the business is presented as discontinued operations.
06—Continue