01—Abstract
Summary
Summary of the 10-Q filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.
International Paper Company's first-quarter 2026 results show net sales of $5.97 billiona, up from $5.26 billion in the first quarter of 2025, with earnings from continuing operations of $76 million compared with a loss of $124 million a year earlier.
Diluted earnings per share from continuing operations were $0.14b, and net earnings were $60 million, or $0.11 per diluted share. The filing attributes the sales increase primarily to three months of DS Smith activity in 2026 versus two months in 2025. Adjusted EBITDA from continuing operations was $677 million versus $689 million a year earlier, and adjusted operating earnings were $81 million, or $0.15 per share, compared with $73 million, or $0.17 per share.
The company completed the sale of its Global Cellulose Fibers business to American Industrial Partners on January 23, 2026, receiving cash consideration of $1.1 billionc plus preferred stock with a $168 million liquidation preference. It used part of the proceeds to reduce debt by $660 million. Cash provided by operations was $611 million, and free cash flow was $94 million, compared with a $618 million outflow in the prior-year quarter.
Long-term debt fell to $8.18 billiond from $8.84 billion at year-end 2025. Management expects adjusted EBITDA to be sequentially lower in the second quarter across both regions, citing planned maintenance outages and freight and energy cost pressures.
Strategically, the company announced an agreement to acquire North Pacific Paper Company (NORPAC) for $360 million and plans to separate its EMEA packaging business through a spin-off expected within 12 to 15 months of the January 29, 2026 announcement, with IP retaining an approximate 20% stake. The filing also discloses ongoing legal and environmental matters, including a new EPA unilateral administrative order issued April 28, 2026 for the San Jacinto northern impoundment, and a purported antitrust class action over containerboard pricing.
02—Key points
Key Highlights
- Net sales were $5.97 billion for Q1 2026, up from $5.26 billion, largely reflecting three months of DS Smith activity versus two months in Q1 2025.
- Earnings from continuing operations were $76 million, or $0.14 per diluted share, versus a loss of $124 million in Q1 2025; net earnings were $60 million, or $0.11 per diluted share.
- Adjusted EBITDA from continuing operations was $677 million, compared with $689 million in Q1 2025.
- Cash provided by operations was $611 million and free cash flow was $94 million, compared with cash used for operations of $288 million and free cash outflow of $618 million a year earlier.
- The sale of the Global Cellulose Fibers business for $1.1 billion in cash plus $168 million of preferred stock funded a $660 million reduction in debt.
- PS EMEA business segment operating profit was a loss of $51 million, compared with a profit of $46 million in Q1 2025, while PS NA operating profit rose to $248 million from $142 million.
- Management guided to sequentially lower adjusted EBITDA in Q2 2026 across both regions, and full-year 2026 capital expenditures are expected to be $2.0 billion to $2.1 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, International Paper kept $0.01.
- Revenue$5.97B100.0%
- Cost of revenue−$4.24B71.1%
- Gross profit$1.73B28.9%
- Operating costs−$1.65B27.7%
- Operating income$76.0M1.3%
- Interest, other & tax−$16.0M0.3%
- Net income$60.0M1.0%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 5, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $5.97B$5.26B | +13.4% |
| Cost of Revenue | $4.24B$3.81B | +11.5% |
| Gross Profit | $1.73B$1.46B | +18.4% |
| SG&A Expenses | $510.00M$487.00M | +4.7% |
| Operating Income | $76.00M-$124.00M | +161.3% |
| Interest Expense | $132.00M$135.00M | −2.2% |
| Net Income | $60.00M-$105.00M | +157.1% |
| EPS (Basic) | $0.11$-0.24 | +145.8% |
| EPS (Diluted) | $0.11$-0.24 | +145.8% |
| Shares Outstanding (Basic) | 528.80M437.60M | +20.8% |
| Shares Outstanding (Diluted) | 531.80M437.60M | +21.5% |
05—Questions
Frequently Asked Questions
How did International Paper perform in the first quarter of 2026?
Net sales rose to $5.97 billion from $5.26 billion, and the company reported earnings from continuing operations of $76 million, or $0.14 per diluted share, compared with a loss of $124 million in the first quarter of 2025. Adjusted EBITDA from continuing operations was $677 million, slightly below $689 million a year earlier.
What drove the change in cash flow?
Cash provided by operations was $611 million, compared with cash used of $288 million in Q1 2025. The filing says the prior-year period included significant payments related to the DS Smith acquisition transaction costs, incentive compensation and benefit payments, and severance, which together reduced operating cash flow by $670 million.
What is the status of the EMEA packaging separation?
The company plans to separate its North America and EMEA packaging operations, structuring the EMEA business as a spinoff with International Paper retaining an approximate 20% stake. The transaction is expected to be completed within 12 to 15 months of the announcement, subject to customary approvals including final approval by the Board and SEC registration statement effectiveness.
What acquisition and capital investments did the company announce?
The company agreed to acquire North Pacific Paper Company (NORPAC) for $360 million, subject to regulatory approval. It also plans a $225 million sustainable packaging facility in Rankin County, Mississippi, with construction expected to begin in June 2026 and operations starting in the fourth quarter of 2027.
What are the key outlook items for the second quarter of 2026?
Management expects adjusted EBITDA to be sequentially lower in the second quarter across both regions. In North America, significantly higher planned maintenance outage spending is expected, most notably at the Riverdale mill in Selma, Alabama, while in EMEA, freight and distribution costs and lower energy subsidies are expected to weigh on results.
06—Continue