Clearwater Paper (CLW -8.32%), a major U.S. paperboard packaging supplier, released its second quarter 2025 results on July 29, 2025. The report showed GAAP revenue increase of 14% to $392 million in Q2 2025, compared to $344 million in Q2 2024. However, this was $5 million below analyst expectations for GAAP revenue. Earnings per share from continuing operations (GAAP) reached $0.22 in Q2 2025, versus a loss of $2.50 in Q2 2024, but missed the $0.70 GAAP consensus estimate. The period saw sharply improved operational results, but lower average prices kept margins under pressure. The quarter reflected clear progress since last year, yet the inability to meet market forecasts for GAAP EPS and revenue, along with sustained industry headwinds, capped performance.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS from Continuing Operations (GAAP) | $0.22 | $0.70 | $(2.50) | NM |
| Revenue | $392 million | $397 million | $344 million | 14.0% |
| Adjusted EBITDA | $40 million | $(9) million | NM | |
| Sales Volume (tons) | 304,713 | 272,585 | 11.8% | |
| Paperboard Average Net Selling Price (per ton) | $1,182 | $1,216 | (2.8%) |
Source: Analyst estimates for the quarter provided by FactSet.
Company Background and Business Focus
Clearwater Paper is one of the largest independent producers of paperboard packaging in North America. Its main products are bleached paperboard used in folding cartons for consumer goods, pharmaceuticals, and food service containers. The company’s focus is now fully on paperboard, following the divestiture of its tissue business in late 2024.
Recent strategic moves include acquiring a large paperboard manufacturing facility in Augusta, Georgia in Q2 2024. This deal added significant production capacity. Clearwater Paper targets premium segments with high-end folding carton products and is also investing in sustainable and compostable packaging technologies. Key success factors include operational efficiency, cost management, and leadership in sustainable packaging innovation. The company’s North American scale and sustainability commitments play an important role in its competitive position.
Quarter Highlights: Financial Performance and Operational Update
Revenue grew 14.0% compared to the prior-year quarter (GAAP). The increase was driven primarily by additional volume from the Augusta mill purchase. Management noted, “•Net sales (GAAP) of $392 million in Q2 2025, up 14% primarily due to incremental volume from our acquisition of the Augusta, Georgia mill on May 1, 2024” Actual revenue (GAAP) was $5 million lower than analyst expectations.
Earnings per share from continuing operations (GAAP) rebounded to $0.22 in Q2 2025, from a loss of $2.50 in Q2 2024. This sharp swing was enabled by strong cost discipline and integration benefits from the Augusta site, but profit (GAAP EPS) still missed estimates due to lower-than-expected sales prices and ongoing margin pressure. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) reached $40 million in the quarter, compared to a $9 million shortfall last year, reflecting improved manufacturing performance and the impact of cost savings measures.
Sales volumes rose 12% to 304,713 tons, reflecting increased capacity from Augusta. However, the average net selling price for bleached paperboard slipped 3% to $1,182 per ton as excess capacity in the industry kept pressure on prices. The company stated, “Paperboard average net selling price decreased 3% to $1,182 per ton in Q2 2025,” Management attributed flat or declining pricing to industry oversupply, saying, ““As the industry continues to experience an oversupply position, we remain focused on what is within our control,”
Cost containment was a key theme. Cost of sales (GAAP) rose slightly to $348.8 million in Q2 2025. Selling, general, and administrative expenses, known as SG&A, dropped to $26.1 million from $30.3 million in Q2 2025 (GAAP), Fixed cost reduction efforts remain on track to meet the company’s $30 to $40 million annual savings target in FY2025.
Operationally, the company finished a major maintenance shutdown at the Cypress Bend, Arkansas facility during the period. Additional outages are planned for later in the year, which could temporarily affect production and costs in the upcoming quarters. Clearwater Paper repurchased $4 million of its own shares in Q2 2025, bringing total share repurchases year-to-date to $15 million for the first half of 2025.
There were no material dividend changes in the quarter. CLW does not currently pay a dividend.
Product and Segment Developments
The company’s core product is bleached paperboard, which is used in folding carton and food service packaging. Management highlighted ongoing work on new product families, including compostable food service products and lightweight folding carton offerings. Compostable plates and containers are being developed to address the growing demand for sustainable and environmentally friendly packaging. Clearwater Paper announced that it has BPI certification for compostable products and plans to bring these products to market by year-end.
Additionally, the company continues to explore alternatives for poly-free barrier technologies. These are coatings that help paperboard resist moisture or grease without using plastics, in response to demand for recyclable and compostable packaging. Clearwater Paper stated that while alternative barrier products are available, they remain more expensive to produce and haven’t yet made a noticeable financial impact. The company’s ongoing innovation efforts are focused largely on the U.S. market, with about 90% of shipments serving domestic customers.
Clearwater Paper emphasized operational improvements from integrating the Augusta facility. As part of post-acquisition efforts, it aims to capture synergies through volume gains, cost reductions, and improved asset utilization. Early results from the Augusta mill helped drive volume growth, but unit margins are still pressured by overall industry overcapacity.
Maintenance costs and future outages have been signaled in the company’s outlook, with higher expenses expected as maintenance moves to other sites later in the year.
Outlook and What to Watch
Clearwater Paper’s management did not provide specific earnings or revenue guidance for the next quarter. It reiterated a focus on achieving fixed cost reductions of $30 to $40 million in FY2025 and implementing operational improvements following the Augusta integration. The company also expects continued investment in product innovation but did not quantify expected financial impacts or timing for these new offerings.
Investors should watch for the effects of planned major maintenance outages at the Lewiston and Augusta mills in Q3 and Q4 2025, which could increase short-term costs and temporarily impact volumes. Persistent industry overcapacity and related pressure on selling prices remain a challenge, making the pace of supply–demand rebalancing key for future profitability. Free cash flow was negative for the first half of 2025 (six months ended June 30, 2025), with operating cash flow of negative $26.7 million, reflecting higher capital spending, share repurchases, and integration costs. The company continued allocating capital to repurchase shares, but no dividend was declared or paid. CLW does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
