International Paper reported weaker-than-expected revenue for the first quarter and cut its full-year adjusted earnings projection on Thursday, citing uneven demand for packaging materials and persistent inflationary pressures. The Memphis, Tennessee-based company said higher interest rates and cost volatility have weighed on shipments, particularly across North America and Europe.
For the three months ended March 31, International Paper posted net sales of $5.97 billion, below the analysts mean estimate of $6.01 billion compiled by LSEG. Adjusted earnings per share for the quarter were 15 cents, down from 17 cents in the year-ago period. In reaction to the results and guidance change, the companys shares traded about 5% lower in premarket trading.
Management reduced the companys full-year 2026 adjusted earnings outlook to a range of $3.2 billion to $3.5 billion, down from the prior range of $3.5 billion to $3.7 billion. The company pointed to rising energy, fuel and freight costs, which it linked to the conflict in the Middle East, as factors clouding the outlook for consumer goods makers and contributing to margin pressure.
International Paper reiterated its plan to separate into two independent, publicly traded companies, moving forward with the split of its North American packaging operations from its Europe, Middle East and Africa business. The separation, announced in January, is expected to be completed within a 12 to 15 month window. CEO Andy Silvernail said the company remains confident in the separation despite a tougher macro environment.
The company has been concentrating its portfolio on containerboard and box production using lower-cost assets after exiting pulp and other non-core businesses over recent years. International Papers shares have declined roughly 30% over the past 12 months amid heightened investor scrutiny following a year that included asset sales, impairment charges, a DS Smith acquisition and the plan to split the business.
What the numbers show
- Net sales: $5.97 billion for the quarter ended March 31.
- Analysts consensus: $6.01 billion, according to LSEG.
- Adjusted EPS: 15 cents, down from 17 cents a year earlier.
- Revised full-year 2026 adjusted earnings guidance: $3.2 billion to $3.5 billion (prior: $3.5 billion to $3.7 billion).
- Share performance: down about 5% premarket on the day; roughly 30% lower over the past 12 months.
Company commentary and the revised forecast point to ongoing margin pressure driven by input-cost inflation and higher rates, with particular shipment weakness noted in North America and Europe. Management continues to prioritize a narrower operational footprint centered on containerboard and boxes produced on low-cost assets as it executes strategic portfolio moves.
Investors and market participants will watch the separation timeline and how volatile freight and energy costs, plus the broader interest-rate environment, influence shipments and margins in the quarters ahead.