International Paper Posts $1.10B Q3 Loss on $1.38B EMEA Goodwill Impairment
IP is trading near its 52-week low of $29.26 (9.4% above the low).
Summary
International Paper's Q3 loss of $1.10 billion was driven by a $1.38 billion non-cash goodwill impairment in EMEA packaging, while North America operating profit rose to $427 million and Q4 guidance came in at $460-$500 million. EMEA guidance is discontinued ahead of the DS Smith separation.
Key Events · Earnings and Guidance · IP
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Q3 Loss Driven by EMEA Impairment
Loss from continuing operations was $1.10 billion, or $(2.07) per diluted share, including a $1.38 billion non-cash goodwill impairment charge on the Packaging Solutions EMEA segment.
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North America Profit Nearly Doubles
Packaging Solutions North America segment operating profit rose to $427 million from $204 million in Q2 2026, helped by higher sales prices and improved mill performance.
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Q4 and Full-Year Guidance Issued
Management guided Q4 2026 PS NA operating profit to $460-$500 million and full-year 2026 to $1.3-$1.4 billion; PS NA adjusted EBITDA guided to $700-$740 million for Q4 and $2.27-$2.31 billion for the year.
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Free Cash Flow Turns Negative
Q3 operating cash flow of $339 million was outweighed by $606 million of capital expenditures, producing negative free cash flow of $267 million.
Analysis · IP · Manufacturing
The headline loss is almost entirely a non-cash write-down: $1.38 billion of goodwill on the EMEA packaging segment was impaired, driving a $1.10 billion loss from continuing operations and $(2.07) diluted EPS. Strip that out and adjusted operating EPS was $0.37, with adjusted EBITDA of $843 million — down only slightly from $859 million a year ago. The real operating story is North America, where segment operating profit jumped to $427 million from $204 million in Q2 on higher prices and better mill performance, and management guided Q4 PS NA operating profit to $460-$500 million. Against that, free cash flow was negative $267 million for the quarter as capital spending of $606 million outran operating cash of $339 million. The company also stopped guiding EMEA entirely ahead of the separation into DS Smith plc, whose Capital Markets Day is set for November 3, 2026 — that event, plus the pending EMEA sale process, is where the next re-rating risk sits.
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At the time of this filing, IP was trading at $32.00 on NYSE in the Manufacturing sector, with a market capitalization of approximately $17.7B. The 52-week trading range was $29.26 to $50.25. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.