IP · International Paper Company PFD $4

International Paper's Q1 2026 results showed net sales of $5.97 billion, up 13.5% year-over-year but down from Q4 2025, driven by Packaging Solutions EMEA growth from $1.55B to $2.32B while North America dipped slightly to $3.63B. GAAP earnings from continuing operations swung to a $76 million profit from a $124 million loss last year, with diluted EPS at $0.14 versus $(0.28). Adjusted EBITDA of $677 million edged down from $689 million YoY but beat Q4's $758 million, reflecting operational progress amid headwinds. PS North America operating profit fell to $248 million from $319 million in Q4 due to seasonally lower volumes, higher operating and input costs from a severe winter storm, and inflation, partially offset by productivity gains and deferred maintenance. PS EMEA improved sharply to a $(51) million loss from $(223) million, aided by higher volumes, better packaging margins, and lower maintenance costs, despite energy pressures. Management highlighted North America commercial traction outgrowing the market and EMEA separation progress with a core team focused on the planned split into independent entities. Net special items were a modest $19 million after-tax charge, far below prior quarters' larger impairments and costs. Cash generation strengthened with $611 million operating cash flow and $94 million free cash flow, bolstered by $1.1 billion proceeds from the Global Cellulose Fibers divestiture used to repay $660 million debt. Guidance reflects volatility, narrowing full-year Adjusted EBITDA to $3.20-$3.50 billion and Q2 to $520-$570 million, emphasizing cost discipline, reliability, and capital management in a tough macro environment including inflation and weather impacts.