International Paper reported an adjusted loss of $0.08 per share for the fourth quarter, falling short of analysts’ consensus estimates by $0.10. The company recorded a $2.5 billion goodwill impairment charge tied to its European packaging business, contributing heavily to the quarterly loss. Excluding this impairment, adjusted operating income stood at $180 million, down 15% year‐over‐year, as cost inflation and slower end‐market demand pressured profitability in North America.

Net sales for the quarter rose 53% year‐over‐year to $6.2 billion, driven by higher selling prices and a rebound in packaging volumes. Packaging segment revenues increased 60%, while industrial products and cellulose fibers divisions each posted mid‐teens percentage gains. Adjusted EBITDA margin improved by 140 basis points to 16.5%, reflecting the benefit of pricing actions and productivity measures that offset rising raw material and freight costs.

Management unveiled a plan to separate its packaging operations into two publicly traded companies: one focused on North American corrugated packaging and specialty papers, and a second to encompass the Europe, Middle East and Africa (EMEA) businesses. The board expects the spin‐off to unlock value by providing investors with pure‐play exposure to regional growth profiles and accelerating margin improvement initiatives. The transaction is targeted for completion in the second half of 2026.

Following a failed acquisition of DS Smith’s North American assets last year, International Paper’s shares have declined approximately 30% over the past 12 months. A leading credit research firm downgraded the company to Hold, citing ambitious 2026–2027 EBITDA and free cash flow targets that may be difficult to achieve given muted consumer demand and ongoing restructuring costs. Management reiterated its goal to generate $1.5 billion of annual free cash flow by 2027, but noted that capital expenditures will remain elevated as it invests in efficiency projects and digital capabilities.