Sylvamo (NYSE:SLVM) Issues Earnings Results, Beats Expectations By $0.20 EPS

Key Points

• Sylvamo reported quarterly EPS of $1.33, beating the $1.13 consensus estimate by $0.20. Revenue was $645 million, below the $817.79 million estimate and down 23.8% year over year.
• Adjusted EBITDA nearly doubled quarter over quarter to $128 million, helped by pricing and mix, improved operations, and no scheduled maintenance outages.
• Sylvamo agreed to a binding offer for its European business, with a sale closing expected by the end of Q1 2027, subject to approvals and other conditions. Management cited ongoing input and transportation cost pressures, while planning to focus on North American and Latin American operations after the sale.

Sylvamo (NYSE:SLVM - Get Free Report) announced its earnings results on Friday. The company reported $1.33 earnings per share for the quarter, beating the consensus estimate of $1.13 by $0.20, FiscalAI reports. The firm had revenue of $645.00 million during the quarter, compared to the consensus estimate of $817.79 million. Sylvamo had a net margin of 2.31% and a return on equity of 8.36%. The firm's revenue for the quarter was down 23.8% on a year-over-year basis. During the same quarter in the previous year, the company posted $1.44 EPS.

Here are the key takeaways from Sylvamo's conference call:

• Adjusted EBITDA nearly doubled quarter over quarter to $128 million, with price and mix contributing $25 million and improved operations adding $6 million. The comparison also benefited from having no scheduled maintenance outages in the quarter.
• Sylvamo agreed to a binding offer for its European business, with closing expected by the end of Q1 2027 subject to employee consultations, regulatory approvals, and other conditions. After the sale, Sylvamo would retain a 20% interest in future distributions, while focusing on its North American and Latin American businesses.
• Higher input and transportation costs remain a headwind; management expects another roughly $6 million sequential increase in Q4 and said costs are up about $50 million in 2026 versus 2025. It expects the higher cost level to carry into 2027, while pursuing price, surcharge, mix, and productivity measures to offset it.
• Eastover’s paper-machine optimization remains on schedule and budget, with 60,000 tons of annual capacity expected to begin ramping early next year. Sylvamo also expanded its Sumter converting plan to add a fourth sheeter; despite an additional $25 million of infrastructure spending and a planned mid-2027 startup, management expects the combined investments to earn returns above 30%.
• Management reiterated its capital-allocation priorities: maintain a strong balance sheet, fund projects expected to earn well above the cost of capital, and return remaining cash to shareholders. It said dividends remain foundational and that share repurchases will be prioritized when opportunities arise.

Sylvamo Trading Up 20.1%

Sylvamo stock traded up $6.63 during trading on Friday, reaching $39.70. The company had a trading volume of 848,136 shares, compared to its average volume of 324,193. Sylvamo has a 12-month low of $30.40 and a 12-month high of $56.80. The stock's 50 day moving average price is $34.01 and its two-hundred day moving average price is $39.77. The firm has a market capitalization of $1.58 billion, a price-to-earnings ratio of 16.46, a PEG ratio of 1.56 and a beta of 0.87. The company has a debt-to-equity ratio of 0.88, a quick ratio of 0.80 and a current ratio of 1.47.

Sylvamo Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, October 16th. Investors of record on Friday, October 2nd were given a $0.45 dividend. The ex-dividend date of this dividend was Friday, October 2nd. This represents a $1.80 annualized dividend and a dividend yield of 4.5%. Sylvamo's dividend payout ratio (DPR) is currently 95.74%.

Sylvamo News Summary

Here are the key news stories impacting Sylvamo this week:

• Positive Sentiment: Sylvamo reported third-quarter earnings of $1.33 per share, above analyst estimates of roughly $1.04–$1.13. The earnings surprise likely helped lift investor sentiment. Sylvamo Surpasses Q3 Earnings Estimates
• Positive Sentiment: The company entered a put option agreement for a potential sale of its European operations to Midas Atlantic Partners and The Najafi Companies. The proposed deal covers its mills in France and Sweden, plus related forestry and support operations; closing is expected in Q1 2027, subject to required processes. A divestiture could let Sylvamo focus its business, though terms and proceeds were not disclosed in the provided reports. Sylvamo Announces Plans to Sell Europe Business
• Negative Sentiment: Revenue was $645 million, well below the cited analyst estimate of $817.79 million and down 23.8% year over year. EPS also declined from $1.44 in the year-ago quarter, highlighting pressure on the business despite the estimate beat. Sylvamo Q3 Earnings Results

Analyst Ratings Changes

A number of equities research analysts have recently commented on SLVM shares. Royal Bank Of Canada lowered their price target on shares of Sylvamo from $46.00 to $35.00 and set a "sector perform" rating for the company in a report on Friday, October 16th. Bank of America decreased their target price on shares of Sylvamo from $45.00 to $42.00 and set a "neutral" rating on the stock in a research report on Wednesday, October 14th. Truist Financial lowered their target price on shares of Sylvamo from $49.00 to $40.00 and set a "buy" rating for the company in a research note on Monday, October 12th. Wells Fargo & Company assumed coverage on Sylvamo in a report on Wednesday, September 16th. They issued an "overweight" rating and a $47.00 price target for the company. Finally, Weiss Ratings reissued a "sell (d+)" rating on shares of Sylvamo in a research note on Wednesday. Two analysts have rated the stock with a Buy rating, three have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat.com, Sylvamo has a consensus rating of "Hold" and an average price target of $41.00.

About Sylvamo

Sylvamo Corporation is a global producer of uncoated paper products. The company manufactures papers used for printing, copying, writing, publishing, commercial applications, notebooks, envelopes and other everyday communication needs. Its portfolio includes branded and private-label products serving businesses, retailers, publishers, printers and consumers.

Sylvamo operates paper mills and related facilities in North America, Latin America and Europe, with products sold to customers in numerous markets worldwide.

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