International Paper (IP) Q1 2026 earnings summary

Executive summary

• Net sales reached $5.97 billion for Q1 2026, up from $5.26 billion in Q1 2025, with earnings from continuing operations of $76 million and adjusted EBITDA of $677 million, reflecting three months of DS Smith activity.

• Achieved above-market growth in North America for the third consecutive quarter, with box shipments up 2.5% year-over-year while the industry declined 0.3%.

• Strategic actions included the sale of the Global Cellulose Fibers business for $1.1 billion, planned acquisition of NORPAC for $360 million, and announcement of a new $225 million packaging facility in Mississippi.

• Progress continued on the planned separation of North America and EMEA packaging businesses into two independent, publicly traded companies, with IP retaining a 20% stake in EMEA for 12–18 months post-separation.

• Free cash flow was $94 million, a significant improvement from negative $330 million in Q1 2025.

Financial highlights

• Q1 2026 adjusted EBITDA was $677 million (11.3% margin), compared to $689 million in Q1 2025 and $758 million in Q4 2025.

• Net sales for Q1 2026 were $5,971 million, down from $6,006 million in Q1 2025 and up from $5,264 million in Q4 2025.

• Diluted EPS from continuing operations was $0.14, up from $(0.28) in Q1 2025.

• Free cash flow for Q1 2026 was $94 million, including a one-time $280 million tax refund.

• $1.1 billion in net proceeds from the GCF business sale, with $660 million of debt paid down.

Outlook and guidance

• Full-year 2026 adjusted EBITDA outlook is $3.2–$3.5 billion, with North America at $2.35–$2.5 billion and EMEA at $900 million–$1 billion.

• Q2 2026 adjusted EBITDA guidance: $380M–$410M for North America, $150M–$170M for EMEA; consolidated guidance $520–$570 million.

• Second half of 2026 expected to see significant EBITDA improvement ($650M step-up in North America, $200M in EMEA) driven by pricing, volume, cost-out, and normalization of headwinds.

• 2027 EBITDA target of $5B supported by incremental price realization, cost improvements, and modest market growth.

• Free cash flow guidance for 2026: $300M–$500M.