International Paper Co (IP) Q3 2026 Earnings Report

The call was cautiously positive. Management highlighted a meaningful sequential earnings improvement, stronger North American execution, productivity gains, price realization, facility simplification, and progress on the EMEA separation. However, these improvements were accompanied by weak demand, persistent inflation, higher input costs, negative third-quarter free cash flow, a lower full-year North America EBITDA outlook, and below-expectation EMEA results. Highlights outweighed the lowlights, but management remained cautious about market conditions through the fourth quarter and into 2027.

International Paper expects North America to outperform the industry by >1% in the fourth quarter and by approx. 2% for the full year, with fourth-quarter Packaging Solutions North America adjusted EBITDA of approximately $700 million to $740 million and full-year 2026 adjusted EBITDA of $2.27 billion to $2.31 billion; price and mix are expected to be favorable, volume favorable, operations and costs slightly favorable sequentially, and input costs unfavorable primarily driven by higher diesel and OCC costs. Full-year free cash flow is expected to be approximately $100 million to $200 million. The company expects current market conditions to persist in the fourth quarter and into 2027, expects long-term demand volume growth of a half point to a point, and expects the markets to be pretty flattish near term; it is not providing guidance for 2027 at this stage, with 2027 guidance planned for the fourth quarter call at the end of January. The September price increase is probably fully realized beginning of Q2, end of Q1, something like that, taking about 4 or 5 months to fully realize and work it through, while Riverdale is expected to reach full ramp through first quarter and second quarter of next year. The company is no longer including existing Packaging Solutions EMEA US GAAP financial guidance and does not anticipate providing such guidance in the future.