Latest news with #PackagingSolutions
Yahoo
01-08-2025
- Business
- Yahoo
International Paper Co (IP) Q2 2025 Earnings Call Highlights: Strategic Moves and Market Challenges
Revenue: Second quarter revenue met expectations, driven by a full quarter of DS Smith and strong price realization. EBITDA Guidance: Holding 2025 EBITDA guidance with commercial and cost improvement efforts taking hold. Free Cash Flow: $54 million for the second quarter; full-year expectation remains $100 million to $300 million. Adjusted Operating Earnings Per Share: $0.20 in the second quarter, compared to $0.23 in the first quarter. Volume: Seasonally higher in North America, softer demand in EMEA. Cost Performance: Unfavorable operations and costs by $0.32 per share, driven by nonrecurring items and strategic actions. Maintenance Outages: Unfavorable by $0.16 per share, with the second quarter being the heaviest for planned outages. Input Costs: Favorable by $0.10 per share, primarily due to lower energy costs. Depreciation and Amortization: Favorable by $0.18 per share due to nonrepeat of accelerated depreciation from the Red River mill closure. Packaging Solutions North America: On-time delivery improved to 97% in the second quarter from 92% in the fourth quarter of last year. Packaging Solutions EMEA: Volume slowed by approximately 1% in the second quarter, with signs of recovery in June. Strategic Actions: Closure of four facilities, sale of three facilities, and exit of a noncore business in North America. Commercial Excellence Benefits: Run rate of approximately $650 million for the first half of the year, targeting $1.1 billion by 2027. Warning! GuruFocus has detected 7 Warning Signs with IP. Release Date: July 31, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points International Paper Co (NYSE:IP) is on track with its transformation strategy, aiming for $6 billion in EBITDA by 2027. The company has seen improvements in service and quality, gaining traction with large customers who appreciate the investments made to support their growth. IP's North American Packaging Solutions team has improved on-time delivery from 92% to 97% and is executing well on its transformation journey. The company is making strategic investments, such as the new sustainable packaging plant in Salt Lake City, to drive growth in attractive markets. IP is holding its 2025 EBITDA guidance, with commercial and cost improvement efforts taking hold, and expects higher earnings in the third quarter driven by higher volume and lower costs. Negative Points Cost performance in North American mill systems and EMEA is not where the company wants it to be, with $150 million of profit left on the table due to reliability issues. The EMEA market remains soft, with macroeconomic volatility and unresolved tariff negotiations posing challenges. The company has had to close facilities and exit non-core businesses to reduce complexity and minimize costs. IP's second quarter results were impacted by unfavorable nonrecurring items and costs from transformation efforts. The company is facing challenges in its North American mill system, with ongoing reliability issues due to underinvestment over the years. Q & A Highlights Q: What is causing the ongoing mill reliability issues, and how does International Paper plan to address them? A: Andrew Silvernail, CEO, explained that the mill reliability issues are not new and stem from years of underinvestment. The company is redeploying capital from non-competitive assets to those with strategic advantages. The focus is on consistent investment and execution to improve mill reliability over time, which is foundational to their strategy. Q: Can you provide an update on the timeline for the Global Cellulose Fibers (GCF) business? A: Andrew Silvernail, CEO, stated that the goal is to close the GCF business by the end of the year. The process is well underway, and there is no reason to believe that this timeline will not be met. Q: How does International Paper view the earnings outlook for North America versus Europe, given the different challenges in each region? A: Andrew Silvernail, CEO, expressed more confidence in North America due to better control over operations and commercial strategies. In Europe, the focus is on commercial conditions, and while there is progress, the region is more subject to market variability. The company is holding its EBITDA guidance for Europe, despite market softness. Q: What are the expectations for box volumes in North America and Europe, and is there potential for restocking in the second half of the year? A: Andrew Silvernail, CEO, noted that box volumes are relatively flat sequentially. While there is no clear evidence of a significant restocking, there is potential upside if macroeconomic conditions improve. The company is cautious but sees more upside than downside in the long term. Q: How is International Paper progressing with its strategy to exit non-strategic export markets? A: Andrew Silvernail, CEO, reported that the company is making progress in exiting non-strategic export markets, focusing on strategic business where customers value their capabilities. They are about halfway through this process, aiming to reduce reliance on export markets used as a dumping ground for excess domestic production. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
28-04-2025
- Business
- Yahoo
Stora Enso reports 9.1% sales increase in Q1 FY25
Stora Enso, a Finnish packaging company, has reported sales of €2.36bn ($2.68bn) in the first quarter (Q1) of fiscal year 2025 (FY25), a 9.1% increase from the same period of the previous fiscal year. In the interim report for the period of January to March 2025, the company attributed this increase primarily to elevated prices and deliveries. The company's adjusted earnings before interest and taxes (EBIT) rose for the fourth consecutive quarter on a year-on-year basis to €175m in Q1 FY25, which is a 17.7% uptick from the €149m posted in the corresponding quarter of the previous year. The adjusted EBIT margin also saw an improvement, climbing to 7.4% in Q1 FY25 compared to 6.9% in Q1 FY24. Higher prices, volumes, and positive impacts from net currency exchange rates and depreciations more than offset higher fibre costs, stated the company. During Q1 FY25, Stora Enso's operating result witnessed an increase of 21.7%, reaching €171m compared to €141m reported in Q1 FY24. The company's pretax result indicates a 40.8% rise to €132m in Q1 FY25 from the €94m in Q1 FY24. The net result for the period grew 40% year-over-year to €107m. The company's basic earnings per share for Q1 FY25 stood at €0.14, up 43.5% from €0.10 reported in the same period of the previous year. Stora Enso president and CEO Hans Sohlström said: 'This improvement primarily resulted from higher prices, alongside increased volumes, favourable foreign exchange rates, and the positive impact of cost-saving and value-creation initiatives, which helped mitigate continued high fibre costs.' Looking ahead, Stora Enso expects its adjusted EBIT for the entirety of FY25 to be adversely affected by around €100m due to the ramping up of its new packaging board line in Oulu, Finland, with a significant portion of this impact anticipated in Q2. For FY25, the group has projected its capital expenditures to be between €730m and €790m. In Q2 FY25, it also anticipates maintenance costs to surpass the first quarter by roughly €20m. Within its Packaging Materials division, Stora Enso predicts a stable containerboard market with ongoing price increments from Q1 to Q2. The demand for consumer board is expected to be seasonally stronger, and output from the company's new consumer packaging board line is set to gradually boost delivery volumes. The Packaging Solutions division, meanwhile, is anticipating heightened demand in Western Europe, driven by the seasonal fruit and vegetable market. Last week, Stora Enso announced plans to reorganise its structure into seven profit and loss accountable business areas, emphasising the significance of its renewable packaging operations. "Stora Enso reports 9.1% sales increase in Q1 FY25" was originally created and published by Packaging Gateway, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
