U.S. packaging producer International Paper posted a third-quarter loss from continuing operations of $1.10 billion, including a $1.38 billion non-cash goodwill impairment charge for its EMEA packaging business. Adjusted EBITDA from continuing operations was $843 million, while softer demand reduced sales volumes in North America and EMEA, the company said.

Net sales were $6.20 billion, compared with $6.22 billion in the third quarter of 2025 and $6.00 billion in the second quarter of 2026. Adjusted operating earnings were $197 million, compared with an adjusted operating loss of $224 million a year earlier and adjusted operating earnings of $18 million in the previous quarter. Cash provided by operating activities was $339 million, while free cash flow was negative $267 million.

International Paper targets Packaging Solutions North America business segment operating profit of $460 million to $500 million in the fourth quarter and $1.3 billion to $1.4 billion for full-year 2026. It targets North American packaging adjusted EBITDA of $700 million to $740 million for the fourth quarter and $2.27 billion to $2.31 billion for the year. The company said it does not anticipate providing future financial guidance for its EMEA packaging business.

“At the same time, we are advancing the separation of our EMEA packaging business. We have conviction in our strategy, confidence in our ability to execute and a clear path to becoming a stronger International Paper that delivers value for all stakeholders,” said Andy Silvernail, chairman and CEO, in a statement.

Packaging Solutions North America business segment operating profit was $427 million, compared with $204 million in the second quarter and a $166 million loss a year earlier. Net sales were $3.88 billion, as higher sales prices were partly offset by lower volumes in a softer demand environment. Lower planned maintenance outage costs and lower sales volumes reduced product costs, while recovered fiber, energy and fuel costs became more expensive.

Improved mill performance reduced operating costs, including because the Riverdale paper machine conversion did not recur. Operations at Pine Hill were suspended. Depreciation and amortization increased because of two additional months of depreciation expense for the NORPAC mill compared with the second quarter, along with additional box system investments.

EMEA packaging recorded a $73 million operating loss, compared with losses of $80 million in the second quarter and $58 million a year earlier. Sales were $2.28 billion, down from $2.31 billion a year earlier, as higher paper prices were more than offset by lower volumes in a continued soft market. Packaging margins were affected by higher paper prices not yet reflected in previously published box pricing.

International Paper said it had made significant progress preparing to separate the EMEA packaging business into an independent company that will be known as DS Smith plc. The business leadership team is scheduled to hold a Capital Markets Day in London on Tuesday, from 1 p.m. to 5 p.m. GMT. The third-quarter results are preliminary and will be finalized in the company's Form 10-Q, which it plans to file on or about November 4, 2026.