A maker of corrugated boxes, folding cartons, and other paper-based packaging used by food and consumer-goods companies around the world, formed in July 2024 when Irish box-maker Smurfit Kappa merged with American rival WestRock. Its roots trace back to a small Dublin cardboard-box business Jefferson Smurfit bought in 1938, which grew into one of the world's largest packaging empires. The name simply stitches together the two merged companies' names.
Net income fell 83% in Q1 and remained depressed in Q2 as higher freight, energy, and depreciation costs continued to erode profitability.
Cost pressures that crushed Q1 earnings persisted into Q2. rose 1.1% to $8.0 billion, but contracted 1.7 points to 17.4% and swung from a loss a year ago to $89 million, as higher freight, energy, and costs continued to offset the benefit of lapping last year's restructuring charges. The combined company is generating cash but has yet to show it can convert its scale into consistent profitability.
Key takeaways
rose 1.1% to $8,031 million, driven by a $146 million foreign currency benefit that was partially offset by a $60 million decline from lower selling prices and mix.
contracted 1.7 percentage points to 17.4%, as higher freight, energy, and costs weighed on profitability, though the margin improved 1.0 point sequentially from Q1 2026.
was $89 million, compared to a $28 million loss in the prior-year quarter, when $280 million in and restructuring charges from mill closures depressed the result.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 net sales rose 1% to $8.0B on FX, but six-month net income fell 57% to $154M on higher freight, energy, and depreciation costs.
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increased $91M to $8,031M in Q2, driven by a $146M foreign currency benefit that was partially offset by a $60M lower selling price mix.
Six-month attributable to common shareholders dropped $202M to $154M, pressured by higher freight, energy, , and adverse weather costs.
North America fell $48M in Q2 to $704M, as higher freight costs and a lower price mix outweighed lower raw material and downtime costs.
North America fell $48 million to $704 million, as higher freight costs and a lower price mix more than offset lower raw material and downtime costs.
was $765 million for the quarter, down 7.7% , while was $300 million, down 2.3%, as of $624 million in the first half absorbed much of the cash generated.
Total available liquidity stood at $5,239 million as of June 30, 2026, with $4,562 million in undrawn committed facilities and $677 million in cash.
What changed
The $70 million in accelerated for machine closures flagged in Q1 2026 did not recur as a separately disclosed item in Q2, but higher depreciation and freight costs continued to pressure margins.
The volume decline that subtracted $256 million from in Q1 2026 was not repeated; instead, a $60 million lower selling price mix was the main organic in Q2, suggesting volumes stabilized while pricing weakened.
improved 1.0 point sequentially to 17.4% from 16.4% in Q1 2026, but remains well below the 19-20% range flagged as a recovery target, indicating closure-related and operating cost pressures are receding only slowly.
The material weakness in internal control over financial reporting, outstanding since the 2024 10-K, remains unaddressed with no disclosed progress in this filing.
What to watch
Whether can recover toward the 19-20% range in the second half of 2026 as the company laps the worst of the closure-related costs and downtime.
The trajectory of selling prices and mix, given the $60 million in Q2, to determine if pricing power is eroding in a stable volume environment.
Debt reduction progress, with at $13.2 billion and remaining a significant drag on .
Any update on the remediation of the material weakness in internal control over financial reporting, which has now been outstanding for over a year.
Europe, MEA and APAC rose $8M to $380M in Q2, helped by lower raw material costs and favorable FX, partly offset by higher freight and energy.
Net decreased $95M to $969M for the six months, while totaled $1,089M and dividends paid were $474M.
Total available liquidity stood at $5,239M as of June 30, 2026, with $4,562M in undrawn committed facilities and $677M in cash.
Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Smurfit Westrock’s exposure to market risk as identified in Smurfit Westrock’s Annual Report on Form 10-K for the year ended December 31, 2025. 43
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There have been no material changes in Smurfit Westrock’s exposure to market risk as identified in Smurfit Westrock’s Annual
Report on Form 10-K for the year ended December 31, 2025.
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The information called for by this item is incorporated herein by reference to “Note 14. Commitments and Contingencies” of the Condensed Consolidated Financial Statements (included in Part I, Item 1).
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The information called for by this item is incorporated herein by reference to “Note 14. Commitments and Contingencies” of the
Condensed Consolidated Financial Statements (included in Part I, Item 1).
Investing in our ordinary shares involves uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially adversely affect our business,…
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Investing in our ordinary shares involves uncertainty and risk due to a variety of factors, including those described in Part I, Item 1A,
“Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially adversely affect
our business, financial condition, results of operations (including revenues and profitability) and/or ordinary share price. There have
been no material changes in our risk factors since our Annual Report on Form 10-K for the year ended December 31, 2025.