IP

This article first appeared on GuruFocus. Adjusted EBITDA: More than doubled sequentially to $60 million, with a margin of 7%. Adjusted Operating Earnings: $0.03 per share. Free Cash Flow: Negative $23 million, a $36 million improvement sequentially. Price and Mix: Favorable by $32 million, reflecting paper price increases in all regions and better mix in the Americas and Europe. Volume: Increased by $3 million, driven by seasonally stronger demand in Latin America. Operations and Costs: Favorable by $22 million, largely due to green energy credits in Europe and lower overhead. Planned Maintenance Outage Costs: Unfavorable by $24 million due to scheduled outages in all regions. Input and Transportation Costs: Unfavorable by $2 million, with higher purchased wood in Latin America and transportation costs in North America, partially offset by the non-repeat of a one-time $10 million charge from International Paper's Riverdale Mill. Warning! GuruFocus has detected 8 Warning Signs with ONL. Is SLVM fairly valued? Test your thesis with our free DCF calculator. Release Date: August 07, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Adjusted EBITDA more than doubled sequentially to $60 million, with a margin of 7%. Price and mix improved by $32 million in Q2, driven by price increases across all regions. Expect $75-85 million benefit from better price and mix in the second half of 2026. Strategic investments at Eastover mill are on schedule and budget, expected to generate $55 million in annual benefits. Lean transformation initiatives are underway, aiming to drive cost savings and operational improvements. Free cash flow was negative $23 million in Q2, with most cash flow expected in the second half. Planned maintenance outage costs were unfavorable by $24 million due to scheduled outages in all regions. North American volumes are expected to decline in the second half due to the loss of Riverdale supply and extended Eastover outage. Tariff changes have made importing product from Brazil uneconomical, reducing volume and earnings benefits. European industry supply and demand remains challenging, with margins at unacceptable levels and ongoing cost pressures. Q: Can you provide more color on the drivers behind the North American margin improvement from 10% in Q1 to 15% in Q2, and where do you expect leverage to end the year given the working capital build?A: Don Devlin (CFO): The North American margin improvement was largely driven by price and mix, along with lower operations and input costs. The working capital build, primarily a 50,000-ton inventory increase in North America for the Eastover project, will unwind by the end of the year, with the drawdown occurring in the second half. Q: You mentioned lower North American volumes in the second half. Is that sales or production, and what are the main drivers?A: Don Devlin (CFO): It's both lower production and sales. The loss of Riverdale supply and a longer-than-planned extended outage at Eastover will reduce production and sales. John Sims (CEO) added that due to new tariffs, it's no longer economical to import volume from Brazil and Europe, so we'll bring in less than previously expected. Q: Can you quantify the $75 to $85 million price and mix benefit for the second half, and how will pricing trend sequentially by region?A: Don Devlin (CFO): About 70% of the $75 to $85 million benefit is price, with the majority coming from North America and Europe. John Sims (CEO) noted that a third price increase is being implemented in Europe, and price increases are being realized in Latin America and North America, with most of the flow-through occurring in Q3 and carrying into Q4. Q: Can you provide an update on the European strategic review, including the timeline for a decision and the options being considered?A: John Sims (CEO): We made significant management changes in Europe and are seeing accelerated performance through mix improvement, cost reductions, and lower wood costs. However, conditions remain difficult. We will likely make a decision in 2027 on whether to continue, and if not satisfied with the outlook, we may pursue other options, including shutting or selling assets. We need roughly $50 million in improvements to get to significantly above cash positive on a mid-cycle basis. Q: Can you help quantify the benefits from better volumes, operations costs, and input costs in the second half versus the first half?A: Don Devlin (CFO): We provided the $75 to $85 million price and mix guidance because we are confident in it. We are also confident in planned maintenance outages. However, there is more uncertainty around volume, operations, and input costs, so we chose not to provide specific guidance on those items. Q: Regarding the poison pill that expires in November, what is the plan?A: John Sims (CEO): The shareholder rights plan remains in place. The board has not made a decision yet, but we will address it when we meet in September. Q: You mentioned the $75 to $85 million price and mix benefit. Will you be at a full run rate on pricing by the fourth quarter?A: Don Devlin (CFO): Yes, we will be at a full run rate by the fourth quarter. North America will definitely be at run rate, and we expect the same for Latin America and Europe. Q: Why did the effective tax rate move up a couple of points?A: Don Devlin (CFO): The increase is mainly due to a Brazil valuation allowance taken on a deferred tax asset in our Brazil export entity. This was related to changing VAT rules, and we merged two entities to take advantage of $30 million in VAT tax credits, which came at the expense of a $9 million valuation allowance expense. John Sims (CEO) added that we would have stranded the $30 million tax credit if we hadn't made this move. Q: How much of the operational focus items, like operational excellence and cost leadership, do you need to get right to achieve the $300 million free cash flow target?A: John Sims (CEO): To achieve the $300 million target, the most important areas are cost leadership and customer centricity. We need to increase the rate and level at which we reduce costs despite high inflationary pressures, and we need intense customer loyalty as the market continues to decline. Q: Can you update us on the earnings impact from the footprint alignment related to Eastover, given the tariff changes?A: Don Devlin (CFO): Due to tariff changes, we will not be able to bring in as much product from Brazil as anticipated last quarter. We will be back near the $85 million estimate provided in February, and the $20 million add-back from Brazil has essentially gone away. Q: Can you talk about the impact of additional Canadian tariffs on the U.S. market, and why is it important to be backward integrated into pulp in Brazil?A: John Sims (CEO): The Canadian tariff was applied to a very narrow product line with small import volume, so the impact on the North American market is minimal. Regarding backward integration, the process of producing paper on an integrated mill allows you to reclaim chemicals and produce your own energy, which is typically a much lower cost way to produce products. Where you have low-cost wood, it makes more sense to be fully integrated. Don Devlin (CFO) added that Luisa Antonio is our lowest cost mill, even compared to Tres Lagos, because it is fully integrated and fiber is the smallest cost. Q: Can you quantify the benefit from improved fiber costs at Nymolla, and what are you seeing in the European pulp markets?A: Don Devlin (CFO): We have seen wood costs decrease about 20% since their peak, and we are starting to see the impact in Q3, which will carry through the rest of the year. Pulp prices are coming up but stabilizing. There are fewer non-integrated players in Europe now, and the traditional relationship where higher pulp prices led to higher paper prices is not as strong. John Sims (CEO) added that we are not going to quantify the exact benefit, but the impact is starting to be seen in Q3. Q: Can you provide more specifics on the bridge into Q3, assuming $40 million of the price and mix benefit and lower maintenance costs?A: John Sims ( For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, July 30, 2026 at 10:00 a.m. ET Chairman and Chief Executive Officer - Andy Silvernail Senior Vice President and Chief Financial Officer - Lance Loeffler Senior Director of Investor Relations - Mandi Gilliland Operator: Good morning, and thank you for standing by. Welcome to International Paper's Second Quarter 2026 Earnings Call. [Operator Instructions] It is now my pleasure to turn the call over to Mandi Gilliland, Senior Director of Investor Relations. Ma'am, the floor is yours. Mandi Gilliland: Thank you. Good morning, and good afternoon, and thank you for joining International Paper's Second Quarter 2026 Earnings Call. Our speakers this morning are Andy Silvernail, Chairman and Chief Executive Officer; and Lance Loeffler, Senior Vice President and Chief Financial Officer. There is important information at the beginning of our presentation, including certain legal disclaimers. For example, during this call, we will make forward-looking statements that are subject to risks and uncertainties. These risks and uncertainties and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. We will also present certain non-U.S. GAAP financial information. A reconciliation of those figures to U.S. GAAP financial measures is available on our website. Our website also contains copies of the second quarter earnings press release and today's presentation slides. So now let me turn it over to Andy Silvernail. Andrew Silvernail: Thanks, Mandi. Good morning, good afternoon, everyone. Let's begin on Slide 3. During the past few quarters, we've been clear about our focus on improved execution. Results in the second quarter showed tangible progress, reflecting the commitment of our team to deliver in a complex operating environment. Across the company, we delivered strong operational performance, successfully executed a particularly heavy outage schedule and advanced key strategic investments. Also, we continued taking cost and complexity out of the business, producing results that exceeded our expectations for the quarter. In North America, we continued our trend of year-over-year box volume growth, and we expect to outpace the industry again this quarter. We also improved our overall mill performance and completed the Riverdale machine conversion on time. In EMEA, we accelerated cost-out actions and advanced our transformational investments. We also continued making steady progress toward the planned separation of our EMEA packaging business. More broadly, the priorities we established for 2026, improving reliability, simplifying the business, strengthening our cost structure and investing where we can create the most value are progressing as expected and reinforcing the momentum we're seeing. We still have work to do, but we're seeing better execution and improving performance as we build a stronger International Paper. Let's take a closer look at the quarter. I'm on Slide 4. One of the clear signs we're making progress is our ability to grow above the market. In the second quarter, our box volumes in North America increased 1.7% year-over-year on a daily basis, and we expect to outpace the industry by approximately 2% for the full year. That growth is a direct result of the work we've done to strengthen customer relationships and win new business. We believe a superior customer experience is an important differentiator for International Paper. We're helping customers improve performance, innovate faster, and grow their businesses. One example of our customer focus in action is the investment we've made in our Aurora, Illinois Commercial Performance and Innovation Center. At Aurora, we've created a place where our customers can work side-by-side with our designers, engineers, and technical experts to solve their toughest problems, innovate together and bring new packaging solutions to market faster. I'm now moving to Slide 5. We're bringing the same intensity to our internal operations, which enables another strategic pillar, an advantaged cost position. This slide shows the impact of the actions we've been taking to strengthen our mill system. Mill performance has improved by approximately 500 basis points year-over-year. More importantly, we're seeing consistent improvement in capacity utilization as the benefits of our focused efforts begin to compound. We've simplified the mill system and reduced costs by executing a series of footprint actions while directing capital to the assets and projects where we'll have the greatest impact. We're also beginning to see returns from targeted investments in reliability and productivity. All of our actions have been driven by a win-the-day mentality that is enabled by a discipline of daily management. The result is a leaner, more efficient mill system that is generating more output from a stronger and more capable asset base. This trend is encouraging and reinforces our confidence that the actions we're taking are delivering the results we expect. On the next slide, we'll take a closer look at some of the key investments helping to drive our improvement. I'm on Slide 6. We're making focused investments across our system to upgrade our portfolio and drive reliability, productivity and growth. This is 80/20 in action. We've made tough choices to exit areas where we weren't delivering adequate returns so we can reinvest that capital where we see the greatest opportunity to win. The 4 investments shown here are examples of that approach. Each one strengthens our competitive position, supports our customers, and drives financial returns in the mid-teens to mid-20s. Let's start with the NORPAC mill. Before turning to the strategic rationale for NORPAC, I want to acknowledge the tragedy that occurred at the neighboring Nippon facility in May. Our thoughts are with those directly impacted and with the entire Longview community, including our own NORPAC employees who call that community home. Safety above all else is our core value, and this is a sobering reminder of why we must be relentless in that commitment. Against that backdrop, we completed the NORPAC acquisition in June. The mill's production was temporarily slowed during the Nippon investigation, but we responded quickly to address the reduced steam supply from their facility. As a result, the current mill operations have returned to pre-incident level. NORPAC is an excellent fit for International Paper. It expands our ability to serve growing demand for lightweight, high-performance packaging grades, reduces distribution costs for the West Coast, lowers our total cost position, and strengthens our overall mill system. At Riverdale, the machine conversion is complete and the ramp-up is progressing as expected. We anticipate the ramp to be largely achieved by the end of the year with the machine reaching full run rate in the first quarter of 2027. The ramp period allows us to work with customers to qualify the machine across all product lines. This project strengthens our product mix, enhances our advantaged cost position, supports a more balanced paper system over time, and is expected to deliver returns consistent with our investment expectations. Next, Dover converting facility acquisition strengthens our footprint in an attractive region, adds an established customer base and supports our long-term growth strategy. In Waterloo, we're preparing to start up in the fourth quarter and expect to be fully operational by the second quarter of 2027. Waterloo is a state-of-the-art facility designed around safety, productivity, and innovation. It expands our presence in an attractive segment of the market and will position us to deliver high-quality packaging solutions with greater speed and reliability. Together, these investments reflect our 80/20 approach, investing in the capabilities and locations that help us win and concentrating resources where they create the most value. Now let's turn to Packaging Solutions EMEA with some of the investments underway there. I'm on to Slide 7. Over the past 18 months, we've taken significant steps to transform the EMEA business. We've simplified the organization, integrated legacy acquisitions, reset the cost base, and built a stronger commercial model around key customer relationships. Investments have been a critical enabler of that work. Across EMEA, we're investing to maintain and strengthen the asset base, improve competitiveness and lower cost, and support growth where we see the most attractive opportunities. The 3 examples on this slide highlight the difference that we're making by putting capital to work. At Lucca, we're modernizing our recycled containerboard platform by replacing an older paper machine with a new lightweight machine that will deliver higher yield, lower energy consumption, and greater sustainability performance. It's a transformational investment that will create a more efficient mill and strengthen our ability to serve our converting network. We expect this investment to come online in the third quarter. In Germany, we're executing on our cost-out strategy by consolidating volume from smaller facilities into more modern and efficient plants like our Lighthouse approach that we use in North America. We're maintaining capacity while improving utilization, lowering fixed costs, and strengthening our cost position. And in Romania, we're investing to capitalize on growth. Eastern Europe continues to be one of the fastest-growing regions in our portfolio at approximately 4% CAGR. We're expanding capacity within an existing operation to support our customers and capture that growth. Taken together, these investments will generate stronger financial returns and illustrate how we're improving the business for the long term, strengthening our asset base, lowering cost, and investing where we see the best opportunities for growth. I'm moving on to Slide 8 and staying focused on our EMEA business. As in North America, we're simplifying the system and aligning resources to the assets and the opportunities that can create the most value. To date, we've announced more than $210 million of run rate footprint and cost savings actions. Those actions include 31 manufacturing facilities and a central office that have closed or in the process of closing and are expected to result in a net reduction of more than 3,000 positions. The actions shown here go beyond site closures. An important part of this work is asset optimization. We're optimizing the network by redeploying equipment, capital and capacity into the sites where we can have the greatest impact. Approximately half of the equipment moves we have planned have already been completed, allowing us to consolidate operations, improve utilization, and better align our assets with customer demand. With that, let me turn it over to Lance to discuss our second quarter results and outlook in more detail. Lance Loeffler: Thanks, Andy. Turning to Slide 9 and our enterprise results for the second quarter. Starting with sales in our North America business. While our box volumes were up 1.7% year-over-year on a daily basis, overall sales declined due to the planned exit of our nonstrategic export business following the closure of our Savannah mill. In addition, our EMEA business experienced softer demand, primarily driven by the geopolitical environment. Earnings and margins declined year-over-year. In North America, the primary drivers were planned outage activity and the Riverdale conversion. In EMEA, we experienced margin squeeze due to the impact of higher paper prices on our packaging sales as well as higher distribution costs. Despite those headwinds, operational performance was stronger than we anticipated, and the results reflect continued progress on execution across the company. Even with a quarter that included significant outage activity and investment spending, free cash flow was stronger than we anticipated. Free cash flow in the quarter was negative $7 million as cash from operations was used to fund transformation initiatives and capital investments of $533 million. Turning to Slide 10 and our Packaging Solutions North America second quarter results compared to the first quarter. Overall, our results reflect solid performance across the business. Price and mix was favorable by $37 million, reflecting faster realization of previously announced price increases and a more favorable mix due to lower export sales. Volume was $16 million favorable, driven by normal seasonal improvement, 1 additional shipping day and continued growth in our domestic business. Operations and costs were $1 million favorable, primarily driven by improved mill performance, Ixtac insurance recovery, and the nonrepeat of the winter storm impact in the first quarter. These favorable items were primarily offset by increased costs associated with the Riverdale conversion and other reliability work completed during the outages. Maintenance outages were $127 million unfavorable in the quarter. As planned, this was a very heavy outage quarter at roughly twice our normal levels. Despite the scale and complexity of the work, the team executed exceptionally well across the system. In fact, the second paper machine at Riverdale returned to service ahead of schedule, while conversion work on paper machine 16 was underway. Input costs were $21 million favorable, primarily driven by the nonrepeat of elevated energy costs associated with the first quarter winter storm. However, those benefits were partially offset by higher OCC and freight costs. In total, Packaging Solutions North America delivered $425 million of adjusted EBITDA in the second quarter. Moving to our third quarter outlook for Packaging Solutions North America on Slide 11. Price and mix are expected to be favorable, driven by the continued realization of previously announced price increases through June publications. Volume is expected to be unfavorable as 1 additional shipping day is more than offset by anticipated lower export volumes. Operations and costs are expected to be favorable sequentially. Benefits from the Riverdale ramp-up and the contribution from NORPAC are expected to more than offset the step-down of Ixtac insurance proceeds anticipated in the third quarter. Input costs are expected to be unfavorable, primarily due to higher OCC and seasonally higher energy costs. Lastly, to ensure the safety of our team members, we proactively suspended operations at our Pine Hill mill to complete structural roof repairs. We currently expect the mill to be operational by the end of August. Our outlook shows a separate line item forecasting an approximately $85 million impact in the third quarter before any expected insurance recovery. These items result in an adjusted EBITDA outlook for Packaging Solutions North America of approximately $555 million to $585 million for the quarter, which includes that Pine Hill impact. Turning to Slide 12. We outlined the key drivers and assumptions behind the step-up we expect in North America from the first half to the second half of this year. Our full year adjusted EBITDA outlook is now $2.35 billion to $2.45 billion. We have reduced the top end of the range by approximately $50 million, primarily based on the macro environment and the prolonged impact from the Middle East conflict. We delivered first half adjusted EBITDA of $902 million and continue to expect a significant step-up in the second half of this year. The right side of the slide walks through the primary drivers supporting that step-up and the progress we're making across the business. Compared to last quarter's view, the favorable adjustments include $50 per ton of the June published price increase, which is now factored into the price total. Volume is now slightly offset given that we originally anticipated an uptick in second half industry demand. We now expect industry demand trends to remain generally stable from the second quarter into the third quarter. Some of our 80/20 initiatives were achieved earlier than planned, shifting a portion of the benefit into the first half of the year and reducing the step-up reflected in the second half. Now that the heavy second quarter planned outages are behind us and the Riverdale ramp-up remains on schedule, our expectations for these items remain unchanged. The largest unfavorable category is the macro environment, where we had anticipated approximately $50 million in headwinds. Now we expect an impact closer to $150 million, primarily driven by elevated transportation spot rates and higher OCC, diesel and employee medical costs. Putting it all together, these factors support an improvement of approximately $600 million from the first half to the second half of this year, excluding the impact from Pine Hill. Our preliminary estimate for the Pine Hill disruption in the second half is between $70 million and $100 million. We do expect to recover the majority of that impact through insurance in the second half, but we're still working through the details. The key takeaway is that we have successfully completed several important milestones in the first half of 2026, including our heaviest outage quarter and the Riverdale conversion. We're realizing prior price increases and continuing to execute our 80/20 initiatives. While the operating environment remains dynamic, these actions will help mitigate macro headwinds and support our confidence in the outlook for the remainder of 2026. Turning to Packaging Solutions EMEA on Slide 13. The business delivered results that were ahead of our expectations for the second quarter. Price and mix was $12 million unfavorable sequentially as higher paper prices for external sales were more than offset by the unfavorable impact of higher paper prices on our packaging sales. Volume was slightly lower sequentially, reflecting continued softness in the market driven by geopolitical uncertainty and consumer sentiment. Operations and costs were $16 million unfavorable sequentially but better than our expectations. While distribution costs associated with higher oil prices remained a headwind, the team made progress on cost-out actions, which mitigated the impact. Input costs were $10 million favorable as lower energy costs, which include subsidies, more than offset higher OCC costs. All in, Packaging Solutions EMEA delivered $182 million of adjusted EBITDA in the second quarter. Moving to our third quarter outlook for Packaging Solutions EMEA on Slide 14. Price and mix are expected to be favorable, driven by the continued realization of prior paper price increases and the related recovery in box pricing. Volume is expected to be favorable, reflecting seasonal strength and the continued onboarding of customer wins. Operations and costs are expected to improve sequentially, driven by progress on our cost-out initiatives and lower distribution costs. Lastly, input costs are expected to be slightly unfavorable as lower OCC costs are largely offset by higher energy costs, including the non-repeat of the energy subsidies received in the second quarter. These items result in an adjusted EBITDA outlook for Packaging Solutions EMEA of approximately $230 million to $250 million for the third quarter. Turning to Slide 15. We outlined the key drivers behind the step-up we expect in EMEA from the first half to the second half of this year. First half adjusted EBITDA was $390 million, slightly ahead of our prior expectations. With that higher starting point, the expected second half step-up is now approximately $170 million, supporting our full year adjusted EBITDA outlook of $900 million to $1 billion for Packaging Solutions EMEA. The largest contributor remains margin recovery and commercial uplift. We expect packaging margins to improve in the second half of the year as prior paper price increases flow through to box contracts. This benefit is supported by incremental commercial growth from new customer wins, normal seasonality, and 3 additional shipping days. Taken together, margin recovery and commercial volume uplift are expected to contribute approximately $110 million of incremental adjusted EBITDA in the second half. Beyond margin and volume, there are 2 additional contributing factors to the step-up. First, we expect to realize about $40 million in cost-out benefits in the second half of this year. These benefits will come mainly from footprint optimization actions and improvement in distribution costs, assuming no further material escalation in geopolitical-driven volatility. Lastly, input costs are expected to contribute approximately $20 million, reflecting anticipated lower OCC costs. Altogether, these factors add up to a second half adjusted EBITDA of approximately $510 million to $610 million for EMEA. With that, I'll turn the call back over to Andy. Andrew Silvernail: Thanks, Lance. I'm on Slide 16. I'll start by noting a couple of points on the planned EMEA separation. We're making good progress and have a dedicated team focused on readiness activities. We are establishing the necessary governance, legal, operational and technological infrastructure and making significant progress on our key transaction documents. The separation remains on track to the announced time line. Next, as we've discussed today, our focus remains clear. As always, all of our actions are focused on delivering value for our customers, our teammates and our shareholders. We're improving execution across the company, strengthening reliability and performance across our network, simplifying the business, and investing strategically to create the most value. We're seeing positive momentum and advancing the priorities we've laid out for the year. As we close, I want to thank the IP team. I am extremely proud of the focus and commitment they have demonstrated in the second quarter. And I have confidence that together, we will deliver strong performance throughout the remainder of the year. With that, let's open up for questions. Operator: [Operator Instructions] Your first question comes from the line of George Staphos with Bank of America. George Staphos: Congratulations on the progress. I guess my first question, as we look at the ramp-up that you have for second half versus first half, and we appreciate the bridge detail. When we do some rough math, it implies a 50% or so increase from the midpoint from third quarter to fourth quarter. So can you talk about some of the individual items that make you comfortable with that outlook, Andy and Lance? And recognizing prices change from day-to-day and week-to-week, what have you factored in for potentially higher diesel prices even since June 30, July 1, given where we're at right now? And my second question is more broad. Can you update us in total, what you've achieved in terms of 80/20 across both -- you had the slide earlier on Europe, but also North America. What do you expect we'll be at for this year? And what will be left for '27? Andrew Silvernail: Yes. I'll take -- let me take the second one, and I'll have Lance put some color on the first question. So I think, George, across the board, if you look at the ramp first half to second half and then as you think about going forward, right, the 80/20 work has been central to everything we've done. Let me start with Europe. You've seen the focus on facility rationalization on reducing the people cost intensity in the business, 31 facilities, over 3,000 people impacted by that. And that will continue to move forward just as we have outlined in the past. So that ramp that allows us to move into significant profit increases through the second half of the year and as we think about next year, that's been the bulk of that. And then really importantly, George, it's a matter of taking those resources and making really smart reinvestments like we have back in the U.S. in terms of -- on the commercial side. So reducing unnecessary waste, taking out unnecessary capacity or ineffective capacity, ineffective assets, driving profitability and reinvesting intelligently back into profitable growth of the business. And we expect to see that same trend as we move into the second half in Europe that we had in the U.S. In the U.S. specifically, right, we've done the major structural changes to the mill footprint and the plant footprint, right? So we've taken out the big chunks of those things. That being said, right, we're continually driving optimization. Every month, I'm out in the field visiting mills and/or a plant. I was recently in Pennsylvania. And the work that we're doing there, we built a new facility a number of years ago, are driving some rationalization that is driving efficiencies in that plant. And now it's about how do you tune that facility to drive incremental profitability, lower utilization of working capital and capital in general. And then it's the big investments that we have made, so cutting and building, right? So the big investments, the big decisions that we made really throughout the last couple of years about taking assets out that were ineffective and reinvesting really aggressively back into a Mansfield, a Riverdale, a NORPAC as examples, back into now a Waterloo and we've announced Mississippi too. The Dover, Delaware box plant that we built. So those things are ongoing, and you should expect to see that kind of change continuing across the company really to take out unnecessary waste, reinvest back into profitable growth. So those are going to continue. Obviously, the massive impact that we had in the U.S., you're starting to see moving towards optimization. And in Europe, we're really still right in the throes of it. So Lance, do you want to tackle the first one? Lance Loeffler: Yes, sure. Just to go back to your question, George, on 3Q to fourth quarter ramp. And I think in particular, you're focused on North America. And I think it's really driven by the momentum that you see or what that would imply for the fourth quarter is really driven by a couple of things. One, the continued ramp in Riverdale, right, as we continue to bring that machine up and online to get to sort of the full run rate by early next year. The second, of course, is the pricing flow-through that's going to continue to strengthen into the end of the year on pubs, the price publications through June, right? So we'll be continuing to add momentum as we realize more price across our box system into the end of the year. And then just the constant maturation of the cost-out initiatives that we've got throughout the business, right, that we're continuing to work on throughout the course of the back half of the year that continue to layer on to the profit momentum that we have. I think those are the things. And if you think about kind of what are the headwinds in the way that we thought about the cost side of this, from a diesel perspective, look, we've just taken a stance that's hard to predict where that goes, given some of the geopolitical uncertainty and the back and forth that we see going on around the world today. So we've just basically taken in our assumptions, the strip. And so that's something that we've kept relatively simple from an assumption perspective. Operator: Your next question comes from the line of Matthew McKellar with RBC. Matthew McKellar: First, I'd like to ask just how you're managing the downtime at Pine Hill with conditions as seemingly tight as they are. You called out some favorable mix and less exports in the Q3 outlook for North America in the materials. I think that would be separate from the $85 million Pine Hill impact you called out. So any color on the impact of mix and how you supply your converting system would be helpful. And then I guess just to clarify, does your guidance for '26 assume an insurance recovery that would be in the same ballpark as that $70 million to $100 million hit that you expect in Q3 results? Lance Loeffler: Yes. Let me touch on the insurance piece real quick. I mean our intention is we think that there's a high likelihood that a majority of that will be reimbursed. We are endeavoring to make sure that we try to match that as close to the periods that are impacted as possible to avoid the noise in some of the sequential comp comparisons. So we're focused on it. It's still early days. Majority of it is around the business interruption side of the business. And so we will be working with our insurance providers to work through it, and we'll keep you guys updated as we get deeper into the process. Andrew Silvernail: Yes. And on Pine Hill specifically, in terms of how you think about the network and the impact to it, there's a few things. Number one, we think that we'll be up and running by the end of August. So it won't be an extended period of downtime. However, right, given the tightness in our system and in the system in general, right, it certainly has an impact. We started actually, if you think about all the work that we've done in the past couple of years of optimizing the system, very thankful that we've been ahead of the curve on that in terms of being able to match paper grades to customers, to industries, to locations. And so we've had a lot of work has gone on ahead of time. Thankfully, that's really good news. And one of the things we've been driving across the board is to maximize the mill network efficiency along all paper grades. Also, we have downgraded or reduced the amount of export that's out into the system. So we're pulling that back into the network to make sure we take care of our core customers. So it will be a tight couple of months, right? If you think about July and August, there's no doubt it will be tight and it exacerbates the tightness in the market across the board. But we think we've got it covered. We can't deny though that it will be tight here over the next month or so. And then we think we'll ramp out of that pretty quickly. Matthew McKellar: Okay. Very helpful. And if I could just follow up with one more. Between what's been recognized so far and announced to the market, North American pricing seems like it should be meaningfully higher in '27. How are you thinking about what kind of supply response you see across the industry as that kind of flows through? To what extent do exports continue to move lower? Are you likely to see new capacity announcements? How... Andrew Silvernail: Matthew, Matthew, I'm going to -- let me interrupt you. You're really muffled. We could not hear the second part of that. So if you could start the question over again. Matthew McKellar: Sure. Sorry about that. So the price that's been announced and recognized so far, it seems like North American pricing should be meaningfully higher in '27. How do you think about what kind of supply response we see across the industry as that flows through? To what extent do industry exports continue to move lower? Do we see new capacity announcements? How do you expect this to play out? Andrew Silvernail: Yes. Great question. So first of all, in terms of -- like anything, right, supply-demand dynamics are going to drive the competitors' reactions, alternative reactions, things from overseas, you could expect to see potentially a bunch of stuff. I think structurally, as I look at the cost of building, we've done a lot of analysis on replacement costs, right? And as you can imagine, and I think pretty much anyone would attest to, replacement cost of mill assets has skyrocketed in the last half decade. If you think kind of post-COVID, just the ability to build a mill to bring on incremental capacity, it's a much higher bar than it was 5 or 10 years ago. And I think that's a very fair thing to say. So that's not to say that it will not happen, but the bar is higher. It's more expensive, and I think you've really got to think through that. You've heard me say in the past that I thought the threshold for people to really take a high look at that is kind of mid-teens to high teens return on invested capital. And I think there's -- for somebody to enter the market with a major mill investment, I don't know that we're quite there yet. But our own analysis and we think about that. Reactions from overseas. Obviously, you have the shipping costs that are very substantial, especially when you look at the incremental energy costs, incremental OCC costs that are out there in the system. So there are some challenges to that, but we'd be naive to think that you won't see some movement across that. And then finally, on alternative replacements, obviously, what we've seen in the Middle East with the cost of energy and therefore, how that's impacting the world of plastics. Generally, I feel good about where we are. I like our position. I like how we have managed our business and how we're reacting to the market. And so I feel good about where we stand and good about the future. Operator: Your next question comes from the line of Mark Weintraub with Seaport Research Partners. Mark Weintraub: I apologize if it's a bit detail oriented here, but it sort of ties together, George and Matthew's question a little bit. And just clarifying, is Pine Hill included in the updated $3.2 billion to $3.4 billion guide and if -- and/or recoupment of insurance proceeds, but that might help explain the very large pickup from 3Q to 4Q and just clarify a few other things. If you could just tell us some specifics on that. Lance Loeffler: So in the overall total guide, it's not included. It's excluded, right? But what we're anticipating is that we recuperate the majority of the loss in the second half of the year. Mark Weintraub: Got it. Okay. And then if I could, sort of two. But for next year, given what you're seeing here, how are you feeling about kind of the $4.5 billion, $5 billion that you've talked about for a while, which frankly seemed like a big stretch at one point, but maybe is looking somewhat more feasible. I don't know if you're willing to provide updated thoughts there. And then kind of at the same time, you talked about demand being more flat rather than up year-over-year in corrugated. Any kind of additional color? Is that just a macro call? Or what's the change there? Andrew Silvernail: Yes. So let me tackle the second question first, and then I'll come back to the broader implications. So on the demand side, what we've seen in the U.S. and in Europe is the expected pickup in the second half. We're now not seeing that given what's going on with inflation and affordability. We think that mutes the overall market going into the second half of the year, where we had expected a pickup of about 1 point. And so we're downgrading that to effectively flat in the second half of the year in North America and up modestly in Europe in the second half of the year. That being said, that really is -- if you look at the things that are kind of holding back the market, I'll put the affordability just kind of across the board, that issue is the biggest issue and the uncertainty for the lower end of the economy, right? So if you're sitting in the bottom half of the economic spectrum, you're struggling today. And you can see it with the major consumer packaged goods companies that are out there, the protein companies, the vegetable companies, et cetera, they're certainly seeing that, especially in that more cash constrained part of the economic spectrum. And in that and you put housing with that, we still really have not seen any relief there. So we see some pretty exciting pent-up demand into the future, but I think the conflicts and the affordability questions are going to mute that here certainly into the second half, and we'll see what that means for '27. Very specifically, we're seeing some slowness on the fruit and vegetable side, specifically on the West Coast from what's going on. We've seen everything in the news around some of the issues on the vegetable side with some contamination. We're seeing that firsthand, and it's showing up in our -- in the Western part of the U.S., where the Eastern part is pretty much in line with exactly what we thought. So we believe we can really focus in and narrow that's a short-term impact. But that will be a headwind. For us, we're seeing it in the month of July. We'll see if that lets up here as you see a rebound when people go back to normal behavior. But I expect we'll have some headwind in the third quarter from that. As it regards the -- as we think about what does this mean for the future, I'm going to be very careful not to give any real detail about the future for a couple of reasons. One, there's a lot of uncertainty out there with what's going on with everything in the Middle East and what's happening to input costs and everything else. And so we'll hold off commenting further of what we think the likelihood of demand looks like into the second half of next year. You've seen the pricing. You can do the math on the pricing, right? We've always given kind of a guide of about $9 is a good proxy as we're doing that math, right? So kind of as we think about that math and how it flows through, you can do your math on there of what that means going forward. We've talked in detail about the cost-out efforts that we've done. The other thing we just have to be cautious of is we're getting closer and closer to the spin. And so we -- by regulation, we have to be very cautious about forward-looking statements that aren't appropriate in that process. So we'll be a little bit -- we'll be holding off from there. You'll hear more in the third quarter. And obviously, in the fourth quarter, we'll lay out all of the details of our expectations for 2027. Mark Weintraub: Fair enough. And just to clarify, so that $9 reference, that's $1 per ton of containerboard leads to $9? Andrew Silvernail: Correct. Yes. Thank you, Mark. Thank you for clarifying that. Operator: Your next question comes from the line of Phil Ng with Jefferies. Philip Ng: Solid quarter and good execution. I guess my first question, Andy, you and your peers are certainly out with a September containerboard price increase in North America. And as you alluded, the market is quite tight. So when I think about this increase, is this -- do you need this to kind of offset the inflation outlook that you're seeing that's in front of you? Or this is more of getting a proper return because you guys are obviously recapitalizing your assets. And more importantly, bigger picture, when you think about the supply-demand backdrop and where you're deploying capital, what's your pricing philosophy? How should we think about it going forward longer term? Andrew Silvernail: Yes. Look, I mean at the end of the day, it's a combination of pricing to market and supply-demand scenarios, right? And so we make our own decisions on what we believe is the right thing to do given what's happening, certainly on the demand side. Right now, a lot more is happening on the supply side with inflation and the tightness in the market. And so we -- as we think about pricing, we think about what is appropriate given all of the different market forces, and that's why we've landed where we've landed thus far this year. And we'll continue to do that, right? Pricing, as you know, is incredibly dynamic in this environment. And we're really kind of looking at all those different pieces and all those different factors, and that's been driving our investment philosophy and how we thought about the assets that we want to have and what drives profitability, maximum profitability for our business. The pricing up to now has really been eaten by inflation. I mean if you look at what's happened with OCC, energy, diesel, freight, you name it, right, it's unfortunately really eaten every bit of that pricing up until today. What happens to inflation going forward and therefore, what happens relative to the most recent announced price increases, we don't know, right? That -- it's impossible to know. Obviously, we would expect some of it to flow through attractively to the bottom line. But we'll have to see kind of what happens specifically to what's going on in the energy world from the conflict in the Middle East. And what we're seeing with just general inflation across the economy that's still flowing through from trade and tariffs and all the noise on that. So we feel really good about where we are right now. We feel good about the mechanisms we use in that decision-making and ultimately turning into profits in line with the things that we've talked about in the past. Philip Ng: Okay. Very helpful context, Andy. And then as you kind of articulated earlier in your prepared remarks, you're deploying your 80/20 playbook. You're taking out some high-cost capacity. First, that was on the mill side. You've done some on the box side. So one, where are you with that journey on your box network rightsizing? And then certainly, you've announced some investments this year, whether it's Riverdale, Dover, Waterloo, NORPAC, where are you in terms of recapitalizing your asset base in terms of investments? Are you still pretty early in that journey? Just give us a little color in terms of where you are in that process at this point. Andrew Silvernail: Yes. Really good questions, both of them. On the first side, what I would say in the box world, we're really in -- I'm going to call it, optimization mode, where we've taken out the obvious kind of high-cost capacity, things that had to be kind of completely recapitalized were not -- they were uninvestable, so to speak. We've done kind of the big swath of that. Now what you're seeing, right, are the moves that look like, I'm going to call it, on the most aggressive end, a Waterloo or Mississippi, right, where you're really going in and you're making a major bet on a market, on a geography or on productivity. That's kind of the most aggressive side. And then you have things like Dover, which is really around strengthening around the market and being able to integrate box and paper, right, being able to do that in the right kind of market. It's really very consistent with our strategy. Then the next -- I would call the next level would be brownfields, which we have a number that are underway, which we're boosting the right kind of capacity, driving cost points down, driving responsiveness up in the business. And then the last part, the last level of those is really around what I'll call just 80/20 optimization, price, volume, mix, how you think about all those things coming together in and around a geography that has multiple plants. So the example I mentioned earlier that I was in Pennsylvania here a week ago. And there, right, we have multiple facilities servicing that geographic marketplace and getting that right mix of a super plant, which is really kind of blow and go versus hybrid plants that are dealing with a lot more complexity in the marketplace, finding that right combination, we're starting to dial that in, which means responsiveness goes up, cost comes down, and that's exactly what we're trying to do. So we're absolutely working that spectrum of things, and we'll continue to make those bets. But in terms of kind of the bolus of stuff, the really big things that have come one after another, you're going to see it be much more measured as we go forward. On the big investment side, and these are related, obviously, we've made a lot of big bets in the last 2 years. And what I'm really happy about is they're starting to really show up. That's big. So if you think about the combination of things that we've done, right, closures of 3 different mills that effectively were uninvestable, right? You could have put -- you had to put a lot of money into them for really nothing back. That was really around extending the life and frankly, building product or paper that wasn't fit for the right kind of market at the right kind of profitability levels. We made those tough decisions, and then we reinvested super aggressively back into places like Mansfield, Riverdale, NORPAC, where we see a future of more appropriate paper for the marketplace, both in terms of grade and location and market at significantly lower cost points. I think, frankly, I think we're going to find that NORPAC was a great acquisition in terms of a great asset, a great team in the right location at a very attractive cost point as an example. The investments in Mansfield have paid off dramatically. We're starting to see Riverdale ramp up, knock on wood, right, because we're still early in that journey. And then to the last part of your question about investment, we've said to expect the same kind of level of investment in North America for the next 2 to 3 years, and you should expect that, right? What I'm trying to drive is the 2 key elements, 2 key pillars of our strategy. One is around an advantaged cost position. We have a footprint and we have, I'll call it, the bones of assets to be absolutely the low-cost player in the marketplace. And I fully intend to drive that relentlessly, to be the low-cost player, not the low-price player. That's not what we're trying to do. We're trying to be in a position where we have strategic choices that others do not. And we very much are trying to drive that across the business. Second, on responsiveness, right, we're integrating more fully our mill and our box network, where we're building -- where we're making the right kind of paper in the right places for distribution to drive cost down and service levels up, which then drives a lower cost position within the box network and the ability to react even faster to customers. And so that cycle, right, that virtuous cycle is what we're now investing in, and that's going to require us to continue to make investments pretty aggressively over the next few years. Philip Ng: That's super insightful, Andy. And looking forward to these investments hopefully coming to fruition contributing nicely next year. Operator: Your next question comes from the line of Gabe Hajde with Wells Fargo Securities. Gabe Hajde: I wanted to ask about the spin. And as you kind of put all the infrastructure in place for that to be a stand-alone entity, would you say that there are still other options that could be pursued or evaluated as part of that process? Andrew Silvernail: Yes. Look, we are working diligently to focus on the spin. That's our priority is to drive the spin. We have a clear path to doing that. We're on track to that. All of our efforts are focused on that. And I don't see a reason why we won't hit the time lines that we've outlined. In terms of alternatives, we've said all along that at the end of the day, right, we have to do the right thing for our shareholders. And if someone shows up and has an appropriate interest and they are the right kind of partner, we have to listen to that. And we certainly would with the right kind of proposition. And so look, at the end of the day, it's about our fiduciary duty and our responsibility to our shareholders and to drive the most value, and that's what we're going to focus on. Gabe Hajde: I want to take one more stab, I guess, at the George's and I think Mark's question. if we dial back to kind of pre DS Smith, and I'm simple. So I'm going to stick with, I think, $1.2 billion of cost saves and $800 million of commercial opportunity in what was kind of PS North America. You guys, I think, acquired maybe $100 million or so of EBITDA in there. But take out the report card, have you actioned everything on the cost side to get you to that $1.2 billion and on an exit rate or what you've accomplished thus far in '25, '26, where would you say you are at on the $1.2 billion? And then on the commercial side, any help there? I mean, I think we can do some of our own math, but I appreciate that demand is probably 3% to 4% less than what you would have anticipated in March. Andrew Silvernail: Yes. So first of all, I think I applaud the fact that you have triangulated appropriately on it, that the fact that your attention to detail and really understanding that, that's a really good thing here. I think in terms of -- there are a few things that have shifted since that original goal. And what I mean by that is just how the world has shifted. And that's really around demand is lower, right, and inflation is significantly higher, right? If you just kind of look at those 2 pieces of it. So we've been squeezed. You're right, it's actually probably more like 4% to 5% if you look at the difference between expectation and actual... Lance Loeffler: What we were saying... Andrew Silvernail: If you look at that, it's probably 4%, 5%. And I'd have to go back and add up the difference in inflation compared to our expectation. But if you kind of think of it on a year-in year-out basis, we're looking at about $200 million of internal inflation, not including input inflation, right? Obviously, the internal, we've dealt with incredibly well. The external, that kind of muddies between that input inflation and then what happens on the commercial side. And you understand that really well. That said, as context, let's go the cost side first, and let's come back to the commercial. So on the commercial, if you look at kind of what you'd expect that's going to flow through the actions that will flow through into next year, in North America, it's in the range of $350 million to $400 million that is carryover cost out of all the things that we've done that being finalized that roll over, right? So if you just kind of do the math on that, that's about what that is. In Europe, it's more like a couple of hundred million dollars, right, $200 million to $250 million that's incremental. So you've got about half of that $1.2 billion that we talked about before that will be finalized, it flowed through. To be clear, almost all of that is actioned, right? Europe still has a few things. I mean they're going to do more as the year goes on. But you're not talking about 3/4 of it having to be actioned. You're talking about 1/4 of it having to be actioned. The rest of it has been actioned and is working its way through the system. What I would say the negative to that is where we have gotten it wrong is the cost to execute has been higher than we expected by -- to some degree, but not outside the realm of pretty darn good execution. So it's taken a little bit longer than we had expected and a little bit more expensive. But if you actually look at the dollars, we've gotten them. There's no doubt about it. On the commercial side, right, what I would say is the commercial has been far more than we expected. right? So it's a much larger number than if you went back 2 years ago than we expected, but it's been eaten up by the inflation, right? And so when it's all said and done, when you put all this together and you kind of look at the 2027 and again, we got to be really careful about how we talk about it. But we're going to be right in the range of what we said 2 years ago, right, that we're going to be right there. If you kind of back out of GCF being sold and you look at the split between North America and Europe, we're going to deliver pretty darn near exactly what we said we were going to do 2 years ago. And so it's been a lot of bumps along the way and the path has not been straight, but I can't tell you how happy I am and how proud I am of people grabbing on to it, dealing with this incredible uncertainty and putting this company in a position to win. Gabe Hajde: I mean I don't think anyone, as you pointed out, had tariffs or a Middle East conflict... Lance Loeffler: It was not on our bingo card. Operator: Your next question comes from the line of Mike Roxland with Truist Securities. Michael Roxland: Congrats on all the progress. Yes. In terms of volumes, a quick question there. You mentioned that your North American volumes were up about 1.7% on a per day basis. I think you -- last quarter, you were guiding them to be up around 3%. What changed with respect to what occurred -- or what occurred during the quarter and what changed relative to your initial expectations? And can you also provide just some more color on how shipments are trending thus far in July, given you also mentioned some headwinds from the West Coast fruit and vegetable market? Lance Loeffler: Yes, I'll cover the first question. I think the confusion there was we're up 1.7%. I think the 3% was what we thought we'd be in terms of versus the market. So it's the difference there. I think that's where you're getting the 3% because nothing has changed from our expectations in terms of where we're falling. I think we're right kind of where we thought we would be. That's exactly. I don't know, Andy, if you want to add more color to that. Andrew Silvernail: Yes. I'm sorry, can you clarify that, Mike, with the second part of that question? Michael Roxland: Sorry, I wanted to get just any color you can have in terms of how your shipments are trending in July? Andrew Silvernail: Yes. So I would say outside of fruit and vegetable, it's pretty much in line with where it's been, which is softer than we had expected, right, but not outside of the bands. I do expect to have some headwind in fruit and vegetable in -- on the West Coast in the month of July. We'll have to see -- I know people may have seen the Taco Bell announcements this morning, they expect -- they're starting to see a return to growth and whatnot. And so that will work itself through. I do expect there to be some volume headwinds in the third quarter from it. The exact number is really hard to put your arms around just because it was really noisy for a couple of weeks. You can see the noise is starting to die down, but let's find out kind of where it is and if consumers are moving back kind of what I'll call just a normal consumption, which historically with these things has happened after a short period of time, but we'll see where that goes. Michael Roxland: Got it. And then one quick follow-up just on price. Lance, I think you mentioned more favorable price in 2Q due to faster realization of previously announced price increases. What does that relate to? I mean have you reworked contracts that is allowing you to recapture price at a faster pace than you have historically? Just any color as to why you're able to capture price faster than history? I appreciate the color. Lance Loeffler: Yes. Look, I think it's just a factor of how we work through this. It's on a contract-by-contract basis. We try to make some assumptions on a 3-year -- I mean, excuse me, a 3-month forward look, 90-day forward look. But -- and we effectively just sort of outperformed in the way that we're executing those contracts. Andrew Silvernail: And I think part of this is just tied to the fact that we put a lot of work into building our commercial team, right? So if you look at the work we've done in terms of people and process, it's not something we've talked a lot about on these calls, but it's where we have retooled a very large percentage of our field force. We've changed incentives, and we have invested in their tools. And so I think it allows them just to move a little bit faster into the marketplace. Operator: We have time for one more question, and that question comes from the line of Anthony Pettinari with Citi. Anthony Pettinari: Just following up on the last question. Assuming the price increases realized in the publication in September, would the hike be fully realized like exiting 1Q '27? I'm just trying to figure out how much you would see in calendar '26 versus calendar '27. Andrew Silvernail: I don't think you'd see -- regardless of what happens to the pub, you pick your number, right? It's just the way it flows, you're not likely to see much in '26. It's really a '27. Anthony Pettinari: Got it. And it would be fully realized exiting 1Q, 2Q. I don't know how you think about the lag, but... Lance Loeffler: It's probably 2Q somewhere. Andrew Silvernail: Right in there. Yes, it's going to be between there. But I mean, it's not going to look a lot different than what you've seen historically. We can't imagine it would be like that. It's pretty systematic. Anthony Pettinari: Got it. Got it. And then one last quick one, and I'm sorry if I missed this. But if I think about the assumptions underlying the full year guide on the cost side, so I guess, OCC, diesel, at the midpoint, are the assumptions that those remain at current levels or 2Q quarter end levels or are you baking in some inflation? Just wondering the kind of cost assumptions underlying. Lance Loeffler: Yes. So we're assuming some cost increase as you get into the latter half of the year around OCC. But really, our diesel cost, like I said earlier, is really the assumption that we're driving there is just today's strip. Andrew Silvernail: Just a few closing comments. So first, just some notes of thanks. I want to thank the European team. They have just carried an incredible load working through Project Diamond and the corporate team that's focused in on doing that, right? So that's our name for it internally on working on the spin. And for anyone who's been involved in those kinds of things, you're doing your day job and then you've got to do that job. And it's an incredible amount of work, and they're doing a terrific job around that. Secondarily, Lance mentioned this in his comments, but if you look at what the second quarter was in terms of workload for the containerboard team for the mill system, in terms of Riverdale and the amount of outages, what they executed, that's no small feat, right? In moments like this, you kind of move past it pretty quickly. But I really want to note the incredible work and the execution that's happened around that while keeping a really tight focus on safety, safety above everything else. And so just congratulations to that team. And then just more broadly, right, we have gone through a lot of change at IP, and we still have more change to go through and people have stepped up. And so I just want to thank everyone for that incredible work. And then finally, to our investors, I appreciate your interest and your continued support in what we're building here at IP, and I thank you for that support. So everybody, take care, and we'll talk to you 90 days. Operator: Once again, we'd like to thank you for participating in International Paper's Second Quarter 2026 Earnings Call. You may now disconnect. Before you buy stock in International Paper, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and International Paper wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $397,081!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,166,221!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. 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Interested in International Paper Company? Here are five stocks we like better. North American operations improved: Box volumes rose 1.7% year over year, mill performance improved by roughly 500 basis points, and the Riverdale machine conversion was completed on schedule. However, unusually heavy maintenance outages reduced second-quarter results by $127 million. Pine Hill will pressure Q3 results: The mill’s temporary shutdown for roof repairs is expected to have an approximately $85 million impact before insurance recoveries, though International Paper forecasts North American Packaging Solutions adjusted EBITDA of $555 million to $585 million. Full-year outlook narrowed amid rising macro costs: International Paper maintained its expectation for second-half improvement but reduced the top end of its 2026 adjusted EBITDA outlook to $2.45 billion, citing higher transportation, OCC, diesel and medical costs. EMEA restructuring and the planned separation of the European packaging business remain on schedule. ScottsMiracle-Gro Stock Blooms After Investor Day Optimism International Paper (NYSE:IP) reported second-quarter operational progress as it worked through a heavy maintenance outage schedule, completed a key machine conversion and advanced restructuring efforts in Europe. The company said execution was stronger than expected despite softer demand in some markets, higher costs and the temporary shutdown of its Pine Hill mill for structural roof repairs. Chairman and Chief Executive Officer Andy Silvernail said the company’s priorities for 2026—improving reliability, simplifying operations, strengthening its cost structure and investing in higher-value assets—were progressing as planned. → Why SK hynix Could Be the Best AI Chip Stock to Buy Now These 5 Penny Stocks Just Surged Double Digits “Results from the second quarter show tangible progress, reflecting the commitment of our team to deliver in a complex operating environment,” Silvernail said. North American box volumes increased 1.7% year over year on a daily basis during the second quarter. Silvernail said International Paper expects to outperform the broader industry by about 2% for the full year, attributing the growth to customer relationships and new business wins. → Microsoft Just Flipped the AI Spending Narrative Overnight The 8 best agricultural ETFs to consider for your portfolio The company also reported a roughly 500-basis-point year-over-year improvement in mill performance, with stronger capacity utilization across its system. International Paper has been simplifying its mill network, closing or exiting lower-returning operations and directing investment toward selected assets. Packaging Solutions North America generated $425 million in adjusted EBITDA in the second quarter. Compared with the first quarter, favorable price and mix contributed $37 million, while volume contributed $16 million. Operations and costs were $1 million favorable, helped by improved mill performance, an insurance recovery related to Ixtoc and the absence of first-quarter winter storm effects. → Carrier Earnings Could Send the Stock to a New All-Time High Those gains were offset in part by $127 million of unfavorable maintenance-outage costs. Chief Financial Officer Lance Loeffler said the quarter included roughly twice the company’s normal outage activity, as well as conversion and reliability work at the Riverdale mill. International Paper completed the Riverdale machine conversion on time. The ramp-up is expected to be largely completed by the end of 2026, with the machine reaching its full run rate in the first quarter of 2027. The company suspended operations at its Pine Hill mill to complete structural roof repairs and expects the facility to return to operation by the end of August. International Paper forecast an approximately $85 million third-quarter impact before anticipated insurance recoveries. Silvernail said the company has reduced export sales and redirected production toward serving core customers during the outage. He acknowledged that July and August would be tight for the company’s supply network and the broader market but said International Paper expects to recover relatively quickly after the mill resumes operations. For the third quarter, International Paper projected Packaging Solutions North America adjusted EBITDA of approximately $555 million to $585 million, including the Pine Hill impact. The company expects favorable price and mix, operating improvements from Riverdale and a contribution from the recently acquired NORPAC mill to help offset higher old corrugated container, or OCC, and energy costs. International Paper acquired NORPAC in June. Silvernail said the mill, located in Longview, Washington, expands the company’s ability to supply lightweight packaging grades and improves its West Coast distribution position. Operations at NORPAC had temporarily slowed following a May incident at a neighboring Nippon facility that reduced steam supply, but Silvernail said the mill had returned to pre-incident operating levels. Packaging Solutions EMEA delivered $182 million in adjusted EBITDA during the second quarter, ahead of the company’s expectations. Results were affected by softer demand tied to geopolitical uncertainty and consumer sentiment, as well as pressure from higher paper and distribution costs. International Paper expects third-quarter adjusted EBITDA for Packaging Solutions EMEA of approximately $230 million to $250 million. The outlook assumes improved price and mix as prior paper price increases flow through box contracts, seasonal volume improvement, customer wins, continuing cost reductions and lower distribution costs. The company said it has announced more than $210 million of run-rate footprint and cost-savings actions in EMEA. These actions include 31 manufacturing facilities and a central office that have closed or are in the process of closing, with net reductions of more than 3,000 positions expected. About half of planned equipment moves have been completed, according to Silvernail. International Paper is also pursuing investments in its EMEA operations, including a new lightweight recycled containerboard machine in Lucca, Italy, expected to come online in the third quarter; consolidation of smaller German facilities into more efficient plants; and capacity expansion in Romania. The planned separation of the EMEA packaging business remains on schedule, Silvernail said. The company is establishing governance, legal, operational and technology infrastructure and advancing transaction documents. He added that International Paper’s focus remains on completing the separation, though the company would consider an appropriate alternative proposal consistent with its fiduciary responsibilities. International Paper reaffirmed expectations for a significant second-half improvement, supported by pricing realization, Riverdale’s ramp-up, cost-reduction initiatives and the completion of major planned outages. The company set its full-year adjusted EBITDA outlook at $2.35 billion to $2.45 billion, reducing the top end by approximately $50 million due primarily to the macroeconomic environment and the prolonged effects of the Middle East conflict. Loeffler said the company now expects macro headwinds of roughly $150 million, compared with an earlier estimate of about $50 million. The higher figure reflects elevated transportation spot rates, OCC and diesel costs, and employee medical expenses. Second-quarter free cash flow was negative $7 million as the company used cash from operations to fund transformation initiatives and capital investments totaling $533 million. International Paper said it expects to continue investing aggressively in North America over the next two to three years, focusing on lower-cost operations, more integrated paper and box production, and improved customer responsiveness. International Paper is a global producer of renewable fiber-based products, focused primarily on pulp, paper, and packaging. The company manufactures containerboard and corrugated packaging used for shipping and retail display, as well as a range of specialty papers and pulp products that serve industrial, consumer goods, and e-commerce customers. Its product portfolio is oriented toward large-scale packaging solutions, tissue and paper grades, and raw pulp for a variety of manufacturing uses. Founded in 1898, International Paper is headquartered in Memphis, Tennessee, and is one of the largest and longest-established companies in the forest products sector. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "International Paper Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

Packaging and materials company International Paper (NYSE:IP) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 11.3% year on year to $6.00 billion. Its non-GAAP profit of $0.04 per share was significantly above analysts’ consensus estimates. Is now the time to buy International Paper? Find out in our full research report. Revenue: $6.00 billion vs analyst estimates of $6.21 billion (11.3% year-on-year decline, 3.3% miss) Adjusted EPS: $0.04 vs analyst estimates of -$0.04 (significant beat) Free Cash Flow was -$7 million, down from $54 million in the same quarter last year Market Capitalization: $22.58 billion "Our teams delivered strong second quarter results as execution continued to improve across the company," said International Paper Chairman and CEO Andy Silvernail. Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications. A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, International Paper’s sales grew at a sluggish 2.5% compounded annual growth rate over the last five years. This was below our standards and is a tough starting point for our analysis. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. International Paper’s annualized revenue growth of 14.2% over the last two years is above its five-year trend, suggesting its demand recently accelerated. We can dig further into the company’s revenue dynamics by analyzing its most important segment, Industrial Packaging. Over the last two years, International Paper’s Industrial Packaging revenue (containers, displays, bins) averaged 1.2% year-on-year growth. This segment has lagged the company’s overall sales. This quarter, International Paper missed Wall Street’s estimates and reported a rather uninspiring 11.3% year-on-year revenue decline, generating $6.00 billion of revenue. Looking ahead, sell-side analysts expect revenue to grow 5.7% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges. ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention. AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice. Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. International Paper was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.1% was weak for an industrials business. Analyzing the trend in its profitability, International Paper’s operating margin decreased by 7.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. International Paper’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers. We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable. Sadly for International Paper, its EPS declined by 16% annually over the last five years while its revenue grew by 2.5%. This tells us the company became less profitable on a per-share basis as it expanded. We can take a deeper look into International Paper’s earnings to better understand the drivers of its performance. As we mentioned earlier, International Paper’s operating margin declined by 7.8 percentage points over the last five years. Its share count also grew by 33.4%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For International Paper, its two-year annual EPS declines of 47.7% show it’s continued to underperform. These results were bad no matter how you slice the data. In Q2, International Paper reported adjusted EPS of $0.04, down from $0.20 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast International Paper’s full-year EPS will flip from negative $0.32 to positive $2.35. It was good to see International Paper beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed. Overall, this was a softer quarter. The stock traded up 1.8% to $43.41 immediately following the results. Is International Paper an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.

International Paper Company IP reported adjusted operating earnings of four cents per share for the second quarter of 2026, down 77.8% year over year. The figure beat the Zacks Consensus Estimate of a loss of four cents by 200%. Elevated planned maintenance outages pressured profitability in the quarter. Including one-time items, the company reported a loss of two cents per share against earnings of 14 cents in the year-ago quarter. Net sales declined 2.2% year over year to $6.00 billion and missed the consensus mark of $6.17 billion by 2.7%. North American box volumes rose 1.7% in the quarter. International Paper Company price-consensus-eps-surprise-chart | International Paper Company Quote Cost of products sold decreased 1.8% year over year to $4.34 billion. Gross profit was down 3.5% year over year to $1.66 billion. The gross margin came in at 27.6% compared with the year-ago quarter’s 28%. Selling and administrative expenses increased 7.4% to $564 million, while distribution expenses rose 1.4% to $523 million. Adjusted EBITDA from continuing operations fell 12.4% year over year to $587 million on expected higher maintenance outage costs. The adjusted EBITDA margin contracted to 9.8% from 10.9%. Adjusted operating income declined 58.6% to $99 million from $239 million in the prior-year quarter. The Packaging Solutions North America segment’s sales were $3.69 billion, down 4.5% year over year but up 1.7% sequentially. Our projection for the segment’s sales was $3.77 billion. The segment’s operating profit declined 26.4% year over year to $204 million. Adjusted EBITDA fell to $425 million from $515 million, while the margin contracted to 12.2% from 13.9%. Higher planned outage costs and lower export volumes outweighed favorable pricing, mix and improved mill performance. Our projection for the segment’s operating income and adjusted EBITDA was $169.7 million and $385.7 million, respectively. Packaging Solutions EMEA sales were $2.29 billion, nearly flat with the prior-year quarter. Our expectation for the segment’s sales was $2.36 billion. The segment reported an operating loss of $80 million compared with a loss of $1 million a year ago. Adjusted EBITDA decreased 6.2% to $182 million, and the adjusted EBITDA margin narrowed to 8% from 8.5%. Higher paper costs within packaging, distribution expenses and weaker volumes offset energy-cost benefits and cost-reduction actions. Our projection for the segment’s operating income and adjusted EBITDA was a loss of $90.1 million and $158.9 million, respectively. Cash provided by operating activities increased to $526 million from $476 million in the year-ago quarter. However, capital expenditures rose to $533 million from $422 million. This led to a free cash flow of a negative $7 million against positive $54 million a year earlier. International Paper expects third-quarter adjusted EBITDA from continuing operations between $780 million and $830 million. The outlook includes an estimated $85 million negative impact from the temporary suspension of operations at the Pine Hill mill for roof repairs.Packaging Solutions North America adjusted EBITDA is projected between $555 million and $585 million, including the Pine Hill impact. Packaging Solutions EMEA adjusted EBITDA is expected between $230 million and $250 million. For 2026, management targets adjusted EBITDA from continuing operations of $3.20-$3.40 billion. The company expects Packaging Solutions North America adjusted EBITDA of $2.35-$2.45 billion and Packaging Solutions EMEA adjusted EBITDA of $900 million-$1 billion. International Paper projects full-year net sales of $24.5-$25.1 billion and free cash flow of $300-$500 million. Capital expenditures are targeted between $2 billion and $2.1 billion, while maintenance outage expenses are forecast at $431 million. The company completed the NORPAC acquisition in June and the acquisition of a converting facility from Delmarva Corrugated Packaging in Dover, DE, in May. It also finished the Riverdale machine conversion, with the ramp-up progressing as expected. Operations at the Waterloo greenfield packaging plant are scheduled to begin in the fourth quarter. In EMEA, International Paper has announced more than $210 million of run-rate savings tied to footprint and headcount actions. The planned separation of the North American and EMEA packaging operations remains on track with the previously announced timeline. The company’s shares have lost 19.4% in the past year compared with the industry’s 8.3% decline. Image Source: Zacks Investment Research IP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Packaging Corporation of America PKG reported second-quarter 2026 adjusted earnings of $2.35 per share, falling 5.2% year over year but beating the Zacks Consensus Estimate of $2.31. Packaging Corp’s sales increased 14.7% year over year to $2.49 billion and surpassed the consensus estimate of $2.40 billion by 3.6%. Total corrugated products shipments reached an all-time quarterly record, rising 24.3% both per day and in total from the prior-year quarter. Smurfit Westrock Plc SW reported second-quarter 2026 adjusted earnings of 35 cents per share, down 20% year over year. The figure missed the Zacks Consensus Estimate of 42 cents by 16.7%. Higher input costs, particularly freight, pressured profitability. Smurfit Westrock's net sales increased 1.1% year over year to $8.03 billion and surpassed the consensus estimate of $7.99 billion by 0.5%. Rayonier Advanced Materials RYAM is expected to release second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 17 cents per share. The company incurred a loss of 43 cents per share in the year-ago quarter. The consensus estimate for Rayonier Advanced Materials’ top line is pegged at $357.5 million, indicating 5.5% growth from the prior-year reported figure. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report International Paper Company (IP) : Free Stock Analysis Report Packaging Corporation of America (PKG) : Free Stock Analysis Report Rayonier Advanced Materials Inc. (RYAM) : Free Stock Analysis Report Smurfit Westrock PLC (SW) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

International Paper Company (NYSE:IP) reported second-quarter 2026 results that exceeded earnings expectations, although revenue came in below Wall Street forecasts. Investors responded positively, with the company’s shares rising 1.4% in premarket trading following the announcement. The packaging and paper producer continued to make progress on operational improvements while advancing several strategic projects during the quarter. International Paper posted adjusted earnings of $0.04 per share, outperforming analysts’ expectations for a loss of $0.04 per share. Revenue totaled $6.00 billion, missing the consensus estimate of $6.23 billion and declining 2.2% from the $6.14 billion reported in the same quarter last year. Adjusted EBITDA from continuing operations came in at $587 million, compared with $670 million in the second quarter of 2025. The company also reported a loss from continuing operations of $12 million, or $0.02 per diluted share, versus net income of $75 million, or $0.14 per diluted share, a year earlier. Looking ahead, International Paper expects adjusted EBITDA for the third quarter to range between $780 million and $830 million. The outlook includes an estimated $85 million negative impact from the temporary closure of its Pine Hill mill in Alabama. Even with that headwind, the midpoint of the guidance, $805 million, represents a significant improvement from the $587 million generated during the second quarter. For full-year 2026, the company maintained adjusted EBITDA guidance of between $3.20 billion and $3.40 billion. “Our teams delivered strong second quarter results as execution continued to improve across the company,” said Chairman and CEO Andy Silvernail. “In North America, we improved mill performance and successfully completed the Riverdale machine conversion, while continuing to grow box volumes and remain on track to outperform the market.” The Packaging Solutions North America business generated operating profit of $204 million on net sales of $3.69 billion. Meanwhile, the Packaging Solutions EMEA division reported an operating loss of $80 million on net sales of $2.29 billion, as softer market conditions, geopolitical uncertainty and cautious consumer sentiment weighed on performance. International Paper generated $526 million in cash from operating activities during the quarter, while free cash flow was negative $7 million. The company also completed several strategic initiatives, including the Riverdale machine conversion and the acquisitions of the NORPAC mill in Longview, Washington, and the Delmarva corrugated packaging facility in Dover, Delaware. International Paper stock price

SECOND QUARTER 2026 FINANCIAL SUMMARY Net sales of $6.00 billion Loss from continuing operations of $12 million Adjusted EBITDA (non-GAAP) from continuing operations of $587 million Cash provided by operating activities of $526 million Free cash flow (non-GAAP) of $(7) million 2026 FINANCIAL TARGETS Adjusted EBITDA (non-GAAP) from continuing operations MEMPHIS, Tenn., July 30, 2026 /PRNewswire/ -- International Paper (NYSE: IP) (LSE: IPC) (the "Company") today announced results for the quarter ended June 30, 2026. "Our teams delivered strong second quarter results as execution continued to improve across the company," said International Paper Chairman and CEO Andy Silvernail. "In North America, we improved mill performance and successfully completed the Riverdale machine conversion, while continuing to grow box volumes and remain on track to outperform the market. In EMEA, we accelerated cost-out actions, advanced transformational investments and continued preparing for the separation as previously communicated." "Looking ahead to the second half of the year, our priorities remain clear: execute with discipline, improve reliability and performance across our network, mitigate rising input costs in a dynamic environment, and deliver commercial and cost-out initiatives," Silvernail added. "While there is still work to do, we are building momentum across the businesses. The progress we are making gives us confidence in our ability to deliver strong performance through the remainder of 2026 and create sustainable value for our stakeholders." Select Financial Measures The preliminary second quarter 2026 results discussed in this release will be finalized in our Quarterly Report on Form 10-Q, which we intend to file with the U.S. Securities and Exchange Commission on August 6, 2026. This release refers to certain non-GAAP financial measures, which are defined below. Diluted EPS from Continuing Operations and Adjusted Operating EPS NON-GAAP FINANCIAL MEASURESThe Company believes that these non-GAAP financial measures, when viewed alongside the most directly comparable GAAP measures, provides for a more complete analysis of the Company's results from continuing operations. Reconciliations to the most directly comparable GAAP measures and an explanation of why management believes these non-GAAP financial measures provide useful information to investors are included later in this release. Adjusted EBITDA from continuing operations is a non-GAAP financial measure defined as earnings (loss) from continuing operations (a GAAP measure) before income taxes, equity earnings (loss), interest expense, net, net special items, non-operating pension expense (income) and depreciation and amortization. The most directly comparable GAAP measure is earnings (loss) from continuing operations. Adjusted operating earnings (loss) and adjusted operating earnings (loss) per share are non-GAAP financial measures defined as earnings (loss) from continuing operations (a GAAP measure) excluding net special items and non-operating pension expense (income). Earnings (loss) from continuing operations and diluted earnings (loss) per share from continuing operations are the most directly comparable GAAP measures. The Company calculates adjusted operating earnings (loss) (non-GAAP) by excluding the after-tax effect of non-operating pension expense (income) and net special items from the earnings (loss) from continuing operations reported under U.S. GAAP. Adjusted operating earnings (loss) per share is calculated by dividing adjusted operating earnings (loss) by the diluted average shares of common stock outstanding. Free cash flow is a non-GAAP financial measure defined as cash provided by (used for) operating activities (a GAAP measure) less capital expenditures. The most directly comparable GAAP measure is cash provided by (used for) operations. For discussion of net special items and non-operating pension expense (income), see the disclosure that follows Effects of Net Special Items and Consolidated Statement of Operations and related notes included later in this release. SEGMENT INFORMATIONThe following table presents net sales and business segment operating profit (loss), which is the Company's measure of segment profitability. Business segment operating profit (loss) is a measure reported to our management for purposes of making decisions about allocating resources to our business segments and assessing the performance of our business segments. We present this information in our financial statement footnotes in accordance with ASC 280 - "Segment Reporting". Second quarter 2026 net sales by business segment and operating profit (loss) by business segment compared with the first quarter of 2026 and the second quarter of 2025 are as follows: Business Segment Results Packaging Solutions North America (PS NA) business segment operating profit (loss) in the second quarter of 2026 was $204 million compared with $248 million in the first quarter of 2026. In the second quarter of 2026, net sales increased reflecting higher sales prices, higher sales volumes and a favorable mix due to lower export sales. Sales volumes were higher driven by continued growth in our domestic business, normal seasonal improvement and the impact of one additional shipping day. Cost of products sold increased driven by higher planned maintenance outage costs and higher sales volumes, partially offset by lower input costs. Input costs were favorably impacted by the non-repeat of higher natural gas costs and utility costs driven by the winter storm, partially offset by higher recovered fiber and freight costs. Operating costs were slightly improved due to stronger mill performance, additional Ixtac insurance recovery and the non-repeat of winter storm impacts in the first quarter of 2026. These benefits were mostly offset by costs of the Riverdale paper machine conversion and other planned reliability spending. In the second quarter of 2026, we successfully completed several strategic initiatives, including the Riverdale machine conversion and the acquisitions of the NORPAC mill in Longview, Washington and the Delmarva corrugated packaging facility in Dover, Delaware. Packaging Solutions EMEA (PS EMEA) business segment operating profit (loss) in the second quarter of 2026 was $(80) million compared with $(51) million in the first quarter of 2026. Net sales decreased in the second quarter of 2026 compared with the first quarter of 2026, as higher sales prices for paper were more than offset by lower sales volumes in a continued soft market driven by geopolitical uncertainty and consumer sentiment. Cost of products sold decreased driven by lower sales volumes, cost-out actions and lower input costs for energy, including subsidies, partially offset by higher recovered fiber costs. Packaging margins were impacted by higher paper prices not yet realized in box pricing. Planned maintenance outage costs were higher in the second quarter of 2026 compared with the first quarter of 2026. Selling and administrative expenses were higher driven by planned annual wage increases. EFFECTS OF NET SPECIAL ITEMS Continuing OperationsNet special items include items considered by management to not be reflective of the Company's underlying operations. Net special items in the second quarter of 2026 amount to a net after-tax charge of $42 million ($0.08 per diluted share) compared with a net after-tax charge of $23 million ($0.04 per diluted share) in the second quarter of 2025 and a net after-tax charge of $19 million ($0.04 per diluted share) in the first quarter of 2026. Net special items in all periods include the following charges (benefits): EARNINGS WEBCASTThe Company will host a webcast today where management will discuss second quarter 2026 earnings, progress on the planned separation of the EMEA packaging business and market conditions as well as the full-year outlook, beginning at 10 a.m. ET (9 a.m. CT). All interested parties are invited to listen to the webcast via the Company's website by clicking on the Investors tab and going to the Events & Presentations page at https://www.internationalpaper.com/investors/events-presentations. A replay of the webcast will also be on the website beginning approximately two hours after the call. Parties who wish to participate in the webcast via teleconference may dial +1 (646) 307-1963 or, within the U.S. only, (800) 715-9871, and ask to be connected to the International Paper second quarter 2026 earnings call. The conference ID number is 4090753. Participants should call in no later than 9:45 a.m. ET (8:45 a.m. CT). An audio-only replay will be available for ninety days following the call. To access the replay, dial +1 (609) 800-9909 or, within the U.S. only, (800) 770-2030 and when prompted for the conference ID, enter 4090753. ABOUT INTERNATIONAL PAPER (NYSE: IP; LSE: IPC)International Paper creates sustainable packaging solutions that enable our customers, teammates and shareowners to thrive in an ever-changing world. We are a leader in corrugated packaging, partnering with customers across industries to protect what matters most, strengthen supply chains and create lasting value. Learn more at internationalpaper.com. Cautionary Statement Regarding Forward-Looking StatementsCertain statements in this press release that are not historical in nature may be considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements can be identified by the use of forward-looking or conditional words such as "expects," "anticipates," "believes," "estimates," "could," "should," "can," "forecast," "outlook," "intend," "look," "may," "will," "remain," "confident," "commit," "plan," and "preliminary" or similar expressions. These statements are not guarantees of future performance and reflect management's current views and speak only as to the dates the statements are made and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these statements. All statements, other than statements of historical fact, are forward-looking statements, including, but not limited to, statements regarding anticipated financial results, economic conditions, industry trends, future prospects, and the anticipated benefits, execution and consummation of strategic corporate transactions. Factors which could cause actual results to differ include but are not limited to: (i) our ability to consummate and achieve the benefits expected from, and other risks, costs and expenses associated with, our plans to separate our North America and Europe, Middle East and Africa ("EMEA") operations into two independent public companies and other corporate transactions on a timely basis or at all, including the risk that an impairment charge may be recorded for goodwill or other intangible assets, which may lead to decreased assets and reduced net earnings; (ii) our ability to successfully integrate and realize anticipated synergies, cost savings and profit opportunities from corporate transactions; (iii) risks associated with our strategic business decisions including facility closures, business exits, operational changes, corporate restructurings and portfolio rationalizations intended to support the Company's 80/20 strategic approach for long-term growth; (iv) our failure to comply with the obligations associated with being a public company listed on the New York Stock Exchange and the London Stock Exchange and the costs associated therewith; (v) risks with respect to climate change and global, regional, and local weather conditions, as well as risks related to our targets and goals with respect to climate change and the emission of greenhouse gases and other environmental, social and governance matters, including our ability to meet such targets and goals; (vi) loss contingencies and pending, threatened or future litigation, including with respect to environmental and antitrust related matters; (vii) the level of our indebtedness, risks associated with our variable rate debt and changes in interest rates; (viii) the impact of global and domestic economic conditions and industry conditions, including with respect to current challenging macroeconomic conditions, inflationary pressures and changes in the cost or availability of raw materials, energy price increases or shortages in energy sources and transportation sources, supply chain shortages and disruptions, competition we face, cyclicality and changes in consumer preferences, demand and pricing for our products, and conditions impacting the credit, capital and financial markets; (ix) risks arising from conducting business internationally, domestic and global geopolitical conditions and tensions involving military conflict (including major global actors such as Russia, the Middle East, the further expansion of such conflicts and the geopolitical and economic consequences associated therewith), as well as broader geopolitical tensions, changes in currency exchange rates, including in light of our assets, liabilities and earnings denominated in foreign currencies as we proceed with the planned separation of our North America and EMEA packaging business, trade policies (including but not limited to protectionist measures and the imposition of new or increased tariffs as well as the potential impact of retaliatory tariffs and other penalties including retaliatory policies against the United States) and global trade tensions, downgrades in our credit ratings, and/or the credit ratings of banks issuing certain letters of credit, issued by recognized credit rating organizations; (x) the amount of our future pension funding obligations, and pension and healthcare costs; (xi) the costs of compliance, or the failure to comply with, existing, evolving or new environmental (including with respect to climate change and greenhouse gas emissions), tax, trade, labor and employment, privacy, anti-bribery and anti-corruption, and other U.S. and non-U.S. governmental laws, regulations and policies (including but not limited to those in the United Kingdom and European Union); (xii) a material disruption at any of our manufacturing facilities or other adverse impact on our operations due to severe weather, natural disasters, climate change or other causes; (xiii) cybersecurity and information technology risks, including as a result of security breaches and cybersecurity incidents; (xiv) our exposure to claims under our agreements with Sylvamo Corporation; (xv) our ability to attract and retain qualified personnel and maintain good employee or labor relations; (xvi) our ability to maintain effective internal control over financial reporting; and (xvii) our ability to adequately secure and protect our intellectual property rights. These and other factors that could cause or contribute to actual results differing materially from such forward-looking statements can be found in our press releases and reports filed with the U.S. Securities and Exchange Commission. In addition, other risks and uncertainties not presently known to the Company or that we currently believe to be immaterial could affect the accuracy of any forward-looking statements. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. View original content to download multimedia:https://www.prnewswire.com/news-releases/international-paper-reports-second-quarter-2026-results-302838432.html

Smurfit Westrock Plc SW has reported second-quarter 2026 adjusted earnings of 35 cents per share, down 20% year over year. The figure missed the Zacks Consensus Estimate of 42 cents by 16.7%. Higher input costs, particularly freight, pressured profitability.Net sales increased 1.1% year over year to $8.03 billion and surpassed the consensus estimate of $7.99 billion by 0.5%. Smurfit Westrock PLC price-consensus-eps-surprise-chart | Smurfit Westrock PLC Quote Smurfit Westrock has reported an operating profit of $309 million, up 23.1% year over year. The company’s cost of sales increased 3.2% to $6.63 billion from the year-ago period. Gross profit fell 7.7% year over year to $1.40 billion.Adjusted EBITDA declined to $1.14 billion from $1.21 billion a year ago, while the adjusted EBITDA margin contracted to 14.2% from 15.3%. In North America, net sales totaled $4.74 billion, moving down marginally from $4.76 billion in the year-ago quarter. Adjusted EBITDA declined 6.4% year over year to $704 million. Corrugated volumes fell 4.8% on a days-adjusted basis, reflecting continued pressure in the region. However, SW noted improving commercial momentum, a supportive pricing backdrop and progress in cost-reduction initiatives.The Europe, MEA & APAC segment delivered net sales of $2.83 billion, up 1.7% from $2.78 billion in the prior-year quarter. The segment’s adjusted EBITDA increased 2.2% year over year to $380 million. Corrugated volumes rose 1.5% on a days-adjusted basis, supported by strengthening containerboard markets, improving corrugated pricing and disciplined cost management.Net sales of the LATAM segment were $559 million, up 7.9% year over year from $518 million. Adjusted EBITDA came in at $124 million compared with $123 million in the second quarter of 2025. Corrugated volumes increased 1% on a days-adjusted basis, aided by healthy demand across the key markets and pricing actions that helped offset inflationary pressures. SW had cash and cash equivalents of $677 million as of June 30, 2026, compared with $892 million at the end of 2025. Net cash provided by operating activities was $765 million compared with $829 million in the year-ago quarter. Capital expenditure totaled $465 million, down from $522 million in the prior-year period.The company announced a quarterly dividend of 45.23 cents per ordinary share, payable Sept. 10, 2026, to shareholders of record as of Aug. 14. For the third quarter of 2026, the company expects adjusted EBITDA of $1.3 billion. Full-year adjusted EBITDA is projected between $4.9 billion and $5.1 billion, with momentum through the second half of 2026.The company expects 2026 freight and energy cost increases of $300 million and $220 million, respectively. Third-quarter year-over-year increases are projected at $80 million for freight and $70 million for energy. Shares of the company have gained 10.1% in the past year against the industry’s 2.5% decline. Image Source: Zacks Investment Research The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Packaging Corporation of America PKG reported second-quarter 2026 adjusted earnings of $2.35 per share, falling 5.2% year over year but beating the Zacks Consensus Estimate of $2.31. Packaging Corp’s sales increased 14.7% year over year to $2.49 billion and surpassed the consensus estimate of $2.40 billion by 3.6%. Total corrugated products shipments reached an all-time quarterly record, rising 24.3% both per day and in total from the prior-year quarter. International Paper Company IP is expected to release second-quarter 2026 results on July 30. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 4 cents per share. The company posted earnings of 20 cents per share in the year-ago quarter.The consensus estimate for International Paper’s top line is pegged at $6.17 billion, indicating an 8.8% decline from the prior-year reported figure.Rayonier Advanced Materials RYAM is expected to release second-quarter 2026 results on Aug. 4. The Zacks Consensus Estimate for the bottom line is pegged at a loss of 17 cents per share. The company incurred a loss of 43 cents per share in the year-ago quarter.The consensus estimate for Rayonier Advanced Materials’ top line is pegged at $357.5 million, indicating 5.5% growth from the prior-year reported figure. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Smurfit Westrock PLC (SW) : Free Stock Analysis Report International Paper Company (IP) : Free Stock Analysis Report Packaging Corporation of America (PKG) : Free Stock Analysis Report Rayonier Advanced Materials Inc. (RYAM) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research