International Paper Posts $1.1 Billion Loss on EMEA Goodwill Charge

International Paper swung to a $1.10 billion third-quarter loss from continuing operations on Wednesday after taking a $1.38 billion non-cash goodwill impairment on its European packaging business, even as its North American packaging unit more than doubled its operating profit from the prior quarter.

The Memphis, Tennessee, packaging maker reported a diluted loss per share from continuing operations of $2.07, compared with a loss of $0.81 a year earlier, according to the preliminary results it filed with an 8-K on Wednesday. Excluding special items and non-operating pension items, adjusted operating earnings were $0.37 per share, versus a loss of $0.43 a year earlier.

A big write-down in Europe

The impairment relates to the Packaging Solutions EMEA segment. International Paper said it measured the segment's current fair value against its carrying value and recorded the pre-tax, non-cash charge as of Sept. 30. In all, net special items amounted to an after-tax charge of $1.31 billion, or $2.46 per diluted share.

The EMEA segment posted an operating loss of $73 million on sales of $2.28 billion, an improvement from a $80 million loss in the second quarter. The company said higher paper prices were more than offset by lower volumes "in a continued soft market."

International Paper is preparing to separate the EMEA packaging business into an independent company to be known as DS Smith plc. Because of the planned separation and related U.K. regulatory requirements, the company said it is dropping EMEA guidance from its outlook framework and does not expect to provide it in the future. The EMEA leadership team plans a Capital Markets Day in London on Nov. 3.

North America rebounds

Packaging Solutions North America earned $427 million in segment operating profit, up from $204 million in the second quarter and a loss of $166 million a year earlier, on net sales of $3.88 billion. The company cited higher prices, lower planned maintenance outage costs, improved mill performance and a full quarter of earnings from the NORPAC mill acquisition, partly offset by softer volumes and higher input and freight costs.

"Our third-quarter results reflect meaningful progress on our strategy despite persistent macro headwinds," Chairman and CEO Andy Silvernail said in the release.

Sales flat, cash flow negative

Total net sales were $6.197 billion, compared with $6.222 billion a year earlier. Adjusted EBITDA from continuing operations was $843 million, versus $859 million.

Cash provided by operating activities fell to $339 million from $605 million, and free cash flow was negative $267 million, compared with positive $150 million a year earlier.

The outlook

For Packaging Solutions North America, International Paper expects fourth-quarter segment operating profit of $460 million to $500 million and full-year 2026 segment operating profit of $1.3 billion to $1.4 billion. It forecast the unit's adjusted EBITDA at $700 million to $740 million for the fourth quarter and $2.27 billion to $2.31 billion for the year.

The company said its results are preliminary and will be finalized in its quarterly report on Form 10-Q, which it intends to file on or about Nov. 4.

Sources

1. International Paper Form 8-K with preliminary third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0000051434-26-000147)

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