International Paper Company

Q3 performance: earnings improved, but cash flow sharply negative (and still pressured by working capital) - Adjusted operating earnings per share (EPS): $0.37; adjusted EBITDA margin up ~400 bps sequentially to 13.6%. - Enterprise adjusted EBITDA: $843M (includes $37M corporate expense). - Free cash flow (FCF): -$267M in Q3 (key reasons: heavy maintenance cash payments from Q2, annual interest on legacy DS Smith debt, and an inventory build/catch-up after disruption).

North America outlook: demand roughly stable; company expects to outpace industry by ~2 pts in 2026 - Box shipments: -2% YoY in Q3, described as ~1 pt better than industry demand estimate (so IP demand loss is smaller than industry decline). - Q4 expectation (North America): grow above market; company expects >1% outperformance in Q4 and ~2% outperformance for full-year 2026. - Main headwinds noted: West Coast fresh fruit/vegetable disruption, protein softness (linked to smaller herds and consumer trade-down), inflation pressures, and strained consumer confidence. - Surprising/important nuance: even with “weak consumer confidence,” management is explicitly framing the market as “pretty stable sequentially” rather than collapsing demand.

North America financial guidance updated downward (inflation + weaker volume) - Full-year 2026 Packaging Solutions North America adjusted EBITDA guidance cut/updated to ~$2.27B–$2.31B. - Management cites incremental headwinds ~ $145M vs prior outlook, largely: - Higher diesel fuel and distribution costs - Increased volume pressure - Includes about $20M net from the Pine Hill event (net of insurance recovery) - Plus employee medical cost increases and an outage timing move from Q1 2027 into late 2026. - Offsetting tailwinds: about $35M price benefit from faster realization of the June price increase and partial September realization. - Q4 adjusted EBITDA outlook for North America: ~$700M–$740M (supported by price/mix, Riverdale ramp, NORPAX synergies, and absence of Pine Hill expense).