01—Abstract
Summary
Summary of the 10-Q filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.
International Paper reported a second-quarter 2026 net loss from continuing operations of $12 milliona on net sales of $6.00 billion, compared with earnings from continuing operations of $75 million on net sales of $6.14 billion in the second quarter of 2025.
For the six months ended June 30, 2026, net sales were $11.98 billionb and net earnings were $48 million, compared with a net loss of $30 million in the prior-year period. The company cited lower sales volumes in the quarter and special items of $54 million, including $43 million of costs tied to the separation of its PS EMEA packaging business. Adjusted EBITDA from continuing operations was $587 million in the quarter, versus $670 million a year earlier, and cash provided by operations for the six months was $1.14 billion, with free cash flow of $87 million.
The company completed the sale of its Global Cellulose Fibers business to American Industrial Partners on January 23, 2026 for $1.1 billionc in cash plus preferred stock with a $168 million liquidation preference, and acquired North Pacific Paper Company (NORPAC) for $368 million on June 4, 2026. Capital expenditures rose to $1.05 billion for the six months, versus $752 million a year earlier, and full-year 2026 capital expenditures are expected to be $2.0 billion to $2.1 billion. Total debt declined, with a $501 million net decrease in the first six months, and the company held BBB (stable) and Baa2 (negative) long-term ratings from S&P and Moody's.
Management expects adjusted EBITDA to be sequentially higher in the third quarter in both regions, and the planned spin-off of the PS EMEA business is expected within 12 to 15 months of its January 29, 2026 announcement. The filing also discloses several legal and environmental matters, including a newly filed containerboard antitrust class action, an EPA unilateral administrative order for the Harris County northern impoundment, and a Brazil goodwill tax dispute with assessments of approximately $434 milliond (adjusted for currency), the majority of which the company would bear under the tax matters agreement with Sylvamo.
02—Key points
Key Highlights
- Q2 2026 net sales were $6.00 billion, down from $6.14 billion in Q2 2025, primarily on lower sales volumes; loss from continuing operations was $12 million versus earnings of $75 million a year earlier.
- Adjusted EBITDA from continuing operations was $587 million in Q2 2026 compared with $670 million in Q2 2025; adjusted operating earnings were $18 million, or $0.04 per diluted share.
- Net special items of $54 million in Q2 2026 included $43 million of costs for the strategic separation of the PS EMEA packaging business.
- Six-month cash provided by operations was $1.14 billion and free cash flow was $87 million, compared with $188 million and negative $564 million in the prior-year period.
- The company completed the $1.1 billion cash sale of Global Cellulose Fibers on January 23, 2026, and acquired NORPAC for $368 million on June 4, 2026.
- Full-year 2026 capital expenditures are expected at $2.0 billion to $2.1 billion; dividends paid were $490 million for the first six months.
- Pine Hill, Alabama mill operations were temporarily suspended at the end of June 2026 after roof damage from a weather event, with resumption expected in August 2026.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q2 FY2026, International Paper lost $0.00.
- Revenue$6.00B100.0%
- Cost of revenue−$4.34B72.4%
- Gross profit$1.66B27.6%
- Operating costs−$1.60B26.6%
- Operating income$64.0M1.1%
- Interest, other & tax−$76.0M1.3%
- Net income−$12.0M0.2%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $6.00B$6.14B | −2.2% |
| Cost of Revenue | $4.34B$4.42B | −1.8% |
| Gross Profit | $1.66B$1.72B | −3.5% |
| SG&A Expenses | $564.00M$525.00M | +7.4% |
| Operating Income | $64.00M-$49.00M | +230.6% |
| Interest Expense | $131.00M$143.00M | −8.4% |
| Net Income | -$12.00M$75.00M | −116.0% |
| EPS (Basic) | $-0.02$0.14 | −114.3% |
| EPS (Diluted) | $-0.02$0.14 | −114.3% |
| Shares Outstanding (Basic) | 529.50M527.90M | +0.3% |
| Shares Outstanding (Diluted) | 529.50M532.60M | −0.6% |
05—Questions
Frequently Asked Questions
Why did International Paper report a loss in the second quarter of 2026?
Loss from continuing operations was $12 million in Q2 2026, compared with earnings of $75 million in Q2 2025. The filing attributes the sales decline mainly to lower sales volumes, while cost of products sold fell $78 million year over year. Interest expense, net decreased to $87 million from $108 million, and the company recorded a $16 million non-operating pension income item and a $15 million income tax benefit.
What is the outlook for the third quarter of 2026?
Management expects adjusted EBITDA to be sequentially higher in the third quarter across both North America and EMEA. In North America, lower planned maintenance outage spending and improved margins are expected to offset lower export volumes, higher input costs and the temporary suspension at the Pine Hill mill. In EMEA, higher paper and box prices, seasonal volumes and cost initiatives are expected to offset higher energy costs.
What is the status of the planned separation of the EMEA packaging business?
The company plans to spin off its PS EMEA packaging business to shareholders, with International Paper retaining about a 20 percent stake, and expects completion within 12 to 15 months of the January 29, 2026 announcement. The filing says the company advanced readiness activities in the second quarter, and that the EMEA business is expected to be listed on both the London Stock Exchange and the New York Stock Exchange. Completion remains subject to approvals, including final approval by the Board and effectiveness of an SEC registration statement.
How much debt does International Paper carry and what are its credit ratings?
At June 30, 2026, the balance sheet showed notes payable and current maturities of $1.00 billion and long-term debt of $8.22 billion, and the filing states that the company's debt has a fair value of approximately $8.8 billion against $9.2 billion of debt. Long-term ratings are BBB (stable outlook) from S&P and Baa2 (negative outlook) from Moody's. The company had no commercial paper borrowings outstanding and was in compliance with its debt covenants.
What significant legal or environmental exposures are disclosed?
The filing discloses a containerboard antitrust class action filed July 29, 2025, for which the company says it is too early to estimate a loss. It also discloses a Brazil goodwill tax matter with assessments of approximately $434 million (adjusted for currency), under which the company would pay 60% of up to $300 million and all amounts above that. In environmental matters, the EPA issued a unilateral administrative order on April 28, 2026 for the Harris County northern impoundment, and the company's total estimated environmental liability was approximately $266 million.
06—Continue