International Paper Co.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 30 July 2026: press release. Guidance figures: 2 raised, 3 lowered, 5 new, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Adjusted EBITDA below prior-year level: Adjusted EBITDA from continuing operations was $587 million, against $670 million in the second quarter of 2025 and $677 million in the first quarter of 2026. Source
• PS North America profit eased: PS NA operating profit was $204 million, against $248 million in the first quarter of 2026 and $277 million in the second quarter of 2025. Net sales were $3,688 million. Source
• PS EMEA operating loss widened: PS EMEA operating loss was $80 million, against $51 million in the first quarter of 2026 and a $1 million loss a year earlier. Source
• Third-quarter EBITDA guided after mill closure: Third-quarter adjusted EBITDA is guided at $780-$830 million, after an $85 million negative effect from the temporary Pine Hill, Alabama mill closure. Source
• Full-year EBITDA top end lowered: Full-year adjusted EBITDA is $3.20-$3.40 billion. The top end moved down from $3.50 billion; the bottom end is unchanged. Source
• Free cash flow negative in quarter: Operating cash flow was $526 million and capital expenditures were $533 million, leaving free cash flow of $(7) million for the quarter. Source

“Our teams delivered strong second quarter results as execution continued to improve across the company,”

Andy Silvernail, International Paper Chairman and CEO

Guidance

What changed from last quarter

• New guidance: Third-quarter adjusted EBITDA guidance of $780-$830 million is given for the first time; the first-quarter release gave a second-quarter range instead. Source
• Guidance lowered: Full-year adjusted EBITDA top end is now $3.40 billion, down from $3.50 billion; the bottom end stays at $3.20 billion. Source
• Guidance lowered: Full-year earnings from continuing operations in the reconciliation table fell to $843-$1,043 million from $965-$1,265 million. Source
• Guidance raised: Full-year special items rose to $91 million from $37 million, and full-year depreciation and amortization rose to $1,965 million from $1,900 million. Source
• New: A temporary mill closure in Pine Hill, Alabama is included in third-quarter guidance, with an $85 million negative impact. Source
• New: The company completed the NORPAC mill acquisition in Longview, Washington and the Delmarva corrugated packaging facility in Dover, Delaware in the quarter. Source
• New: The Riverdale paper machine conversion was completed in the quarter. Source

Results and growth drivers

• Adjusted EBITDA below prior-year level: Adjusted EBITDA from continuing operations was $587 million, against $670 million in the second quarter of 2025 and $677 million in the first quarter of 2026. Source
• Loss from continuing operations reported: The company reported a loss from continuing operations of $12 million, against earnings of $75 million a year earlier. Net sales were $6,004 million. Source
• Adjusted operating EPS at $0.04: Adjusted operating earnings per share were $0.04, against $0.18 a year earlier and $0.15 in the first quarter. Diluted EPS from continuing operations was $(0.02). Source
• Special items weighed on reported results: Net special items were an after-tax charge of $42 million, or $0.08 per diluted share, against $23 million a year earlier. Source
• Six-month earnings from continuing operations: Earnings from continuing operations were $64 million for the six months, against a loss of $49 million a year earlier. Source

Segments and regions

• PS North America profit eased: PS NA operating profit was $204 million, against $248 million in the first quarter of 2026 and $277 million in the second quarter of 2025. Net sales were $3,688 million. Source
• North America sales rose on mix: PS NA net sales rose on higher sales prices, higher volumes and a favorable mix from lower export sales. Source
• PS EMEA operating loss widened: PS EMEA operating loss was $80 million, against $51 million in the first quarter of 2026 and a $1 million loss a year earlier. Source
• EMEA sales lower sequentially: PS EMEA net sales were $2,287 million, against $2,323 million in the first quarter of 2026. Source

“While there is still work to do, we are building momentum across the businesses.”

Andy Silvernail, International Paper Chairman and CEO

Costs, margins and pricing

• Winter storm costs did not repeat: PS NA input costs were favorably affected by the non-repeat of winter storm gas and utility costs, partly offset by higher recovered fiber and freight costs. Source
• Mill gains offset by conversion costs: PS NA operating costs improved on stronger mill performance and an additional Ixtac insurance recovery, but these were mostly offset by Riverdale and reliability spending. Source
• Planned outage costs rose: PS NA cost of products sold rose on higher planned maintenance outage costs and higher sales volumes, partly offset by lower input costs. Source
• EMEA paper price increases not in boxes: PS EMEA packaging margins were affected by higher paper prices not yet recovered in box pricing. Selling and administrative costs rose on planned annual wage increases. Source
• EMEA cost-out and energy relief: PS EMEA cost of products sold fell on lower volumes, cost-out actions and lower energy costs including subsidies, partly offset by higher recovered fiber costs. Source

Demand and volumes

• North American volumes grew domestically: PS NA sales volumes rose on continued domestic growth, normal seasonal improvement and one additional shipping day. Source
• Box growth and market position: Management said the company is continuing to grow box volumes in North America and remains on track to outperform the market. Source
• EMEA market remains soft: Management linked the soft EMEA packaging market to geopolitical uncertainty and consumer sentiment, which reduced sales volumes. Source

“Looking ahead to the second half of the year, our priorities remain clear: execute with discipline, improve reliability and performance across our network, mitigate rising input costs in a dynamic environment and deliver commercial and cost-out initiatives,”

Andy Silvernail, International Paper Chairman and CEO

Guidance for third quarter and year

• Third-quarter EBITDA guided after mill closure: Third-quarter adjusted EBITDA is guided at $780-$830 million, after an $85 million negative effect from the temporary Pine Hill, Alabama mill closure. Source
• Full-year EBITDA top end lowered: Full-year adjusted EBITDA is $3.20-$3.40 billion. The top end moved down from $3.50 billion; the bottom end is unchanged. Source
• Full-year earnings range lowered: Full-year earnings from continuing operations in the reconciliation table are $843-$1,043 million, against $965-$1,265 million before. Source
• Special items and D&A assumptions raised: Full-year special items are $91 million, against $37 million, and full-year depreciation and amortization is $1,965 million, against $1,900 million. Source
• Interest expense assumption held: Full-year net interest expense is kept at $370 million. Third-quarter net interest expense is $90-$95 million. Source

Capital, cash and shareholder returns

• Free cash flow negative in quarter: Operating cash flow was $526 million and capital expenditures were $533 million, leaving free cash flow of $(7) million for the quarter. Source
• Six-month operating cash flow higher: Six-month operating cash flow was $1,137 million, against $188 million a year earlier. Six-month capital expenditures were $1,050 million. Source
• Acquisitions and divestiture proceeds: Six-month acquisitions used $455 million, net of cash acquired, while divestiture proceeds were $1,083 million, net of cash divested. Source
• Cash balance lower than year-end: Cash and temporary investments were $726 million at June 30, 2026, against $1,145 million at December 31, 2025. Source
• Debt reduction in six months: Debt reduction was $593 million in the six months, against $149 million a year earlier. Source
• Dividends and share repurchases: Dividends paid were $490 million in the six months. Repurchases of common stock and restricted stock tax withholding payments were $31 million. Source

Strategy, separation and mill actions

• EMEA separation costs recorded: PS EMEA separation costs were $43 million pre-tax in the second quarter, against $11 million in the first quarter of 2026. Source
• NORPAC and Delmarva deals closed: The company completed the NORPAC mill acquisition in Longview, Washington and the Delmarva corrugated packaging facility in Dover, Delaware. Source
• Riverdale conversion completed: Management said the Riverdale paper machine conversion was completed and that North America mill performance improved. Source
• 80/20 severance costs recorded: Severance and other costs of $9 million pre-tax were recorded in the quarter under the 80/20 strategic approach. Source
• Chile box plant sale gain: An $11 million pre-tax gain was recorded on the completed sale of the box plant in Chile. Source

Coming up, as management said on 30 July 2026

• Form 10-Q filing on August 6: Preliminary second-quarter results will be finalized in the Form 10-Q, which the company intends to file on August 6, 2026. Source

Risks management discussed

• Operational: A temporary mill closure at Pine Hill, Alabama reduces third-quarter adjusted EBITDA by $85 million, per management's guidance. Source
• External: Management named rising input costs in a dynamic environment as a risk to be mitigated in the second half. Source
• Demand: EMEA demand is soft, with management citing geopolitical uncertainty and consumer sentiment as the causes. Source
• Financial: EMEA packaging margins are affected while higher paper prices are not yet reflected in box pricing. Source
• Operational: Management named reliability across the mill network as a priority for the second half of the year. Source

Earlier plans management reported on

• On track: Management said North America remains on track to outperform the market while continuing to grow box volumes. Source
• Not stated: Management said the company continued preparing for the EMEA separation as previously communicated; no date is given. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.