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Icahn Enterprises (IEP) Q1 FY26 earnings call

Earnings call· Mar 2026 (Q1 FY26)· May 6, 2026

Source: earnings call transcript

Executive summary

Icahn Enterprises L.P. Q1 FY26 — NAV Increase and Portfolio Performance

Icahn Enterprises reported a $201 million increase in Net Asset Value for Q1 FY26, driven by strong performance in its Investment segment's long positions, despite significant losses from refining hedges. While several portfolio companies showed robust stock performance and positive outlooks, the company faced operational headwinds in Food Packaging, Home Fashion, and Pharma segments. Management emphasized a continued focus on building asset value and maintaining liquidity to capitalize on future opportunities.

Highlights

5

  • Net Asset Value (NAV) increased by $201 million compared to year-end.

  • Investment segment had a positive return of 4.4% for the quarter, excluding refining hedges.

  • Real Estate adjusted EBITDA increased by $18 million compared to the prior year quarter.

  • Automotive Services same-store sales increased by approximately 2% compared to the prior year quarter.

  • CVI announced a $0.10 dividend, and AEP stock was up approximately 14% for Q1.

Concerns

5

  • Net loss attributable to IEP was $459 million, or a loss of $0.71 per unit.

  • Investment segment had a negative return of 8.2% for the quarter, including refining hedges, due to $320 million in refining hedge losses.

  • Energy segment included $158 million of unrealized derivative losses.

  • Food Packaging adjusted EBITDA decreased by $6 million due to lower volume and restructuring headwinds.

  • Pharma adjusted EBITDA decreased by $10 million due to reduced sales from anti-obesity prescriptions and increased R&D expenses.

Segment performance

SegmentRevenueYoYQoQMargin
Investment Funds
Performance was positive excluding refining hedges, but overall negative due to significant hedge losses. The fund shifted from net long to net short exposure excluding hedges.
Positive return (excluding refining hedges): 4.4%Negative return (including refining hedges): 8.2%Long and other positions performance attribution: 4.1%Short positions performance attribution: -12.9%Net short notional exposure (quarter end): 29%Net short notional exposure (year-end): 13%Net short notional exposure (ex-refining hedges, quarter end): 2%Net long notional exposure (ex-refining hedges, year-end): 19%Investment in funds: $2.2 billion
————
Energy
Adjusted EBITDA improved slightly year-over-year. Refining operations were solid but margins were weighed down by RFS costs and unrealized derivative losses. Fertilizer segment had strong results.
Crude utilization: 97%
———Adjusted EBITDA attributable to IEP: -$5 million
Automotive Services
Revenue decreased due to store closures in 2025, but same-store sales showed positive growth. Focus remains on product, pricing, labor, and distribution strategy.
Same-store sales increase: 2%
Decreased by $9 million———
Real Estate
Adjusted EBITDA increased significantly, primarily driven by income from assets transferred from the Automotive segment.
Intercompany income from auto segment: $9 millionIncome from third-party tenants: $2 million
———Adjusted EBITDA increase: $18 million
Food Packaging
Adjusted EBITDA decreased due to lower volume and disruptive headwinds from a restructuring plan.
———Adjusted EBITDA decrease: $6 million
Home Fashion
Adjusted EBITDA decreased due to softening demand in retail and hospitality, and supply chain disruptions in the Strait of Hormuz.
———Adjusted EBITDA decrease: $2 million
Pharma
Adjusted EBITDA decreased due to reduced sales from anti-obesity prescriptions and increased R&D expenses for disease-modifying designation.
———Adjusted EBITDA decrease: $10 million

IEP operating KPIs by quarter

IEP operating KPIs stated on its earnings calls, by fiscal quarter
KPIThis call Mar 2026 Q1 FY26 Jun 2026 Q2 FY26Change vs prior quarter
Crude utilization rate Energy
97% The first quarter refining operations were solid with crude utilization of 97%, although margins were weighed down by higher RFS obligation costs and unrealized derivative losses. Source: earnings call transcript
98%+ The second quarter refining operations were solid with crude utilization over 98%, although margins were weighed down by higher RFS obligation costs. Source: earnings call transcript
—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

IFF Completion of divestiture of an [indiscernible] business.

IFF completed the divestiture of an unspecified business as part of its portfolio optimization.

IFF Sale process for food ingredients business.

IFF is running a sale process for its food ingredients business as part of its portfolio optimization.

Risks & headwinds

Refining hedge losses Q1 FY26

$320 million

Unrealized derivative losses in Energy segment Q1 FY26

$158 million

Food Packaging lower volume and restructuring headwinds Q1 FY26

Adjusted EBITDA decreased by $6 million

Home Fashion softening demand and supply chain disruptions Q1 FY26

Adjusted EBITDA decreased by $2 million

Pharma reduced sales from anti-obesity prescriptions Q1 FY26

Adjusted EBITDA decreased by $10 million

Increased R&D expenses in Pharma Q1 FY26

Contributed to $10 million Adjusted EBITDA decrease

What to watch in Q2 FY26

CVI debt reductions and capital returns

Balance of 2026
Current CVI announced $0.10 dividend
Target Potential for further debt reductions and capital returns

Why it matters

CVI is a significant long position for IEP, and its capital allocation strategy impacts IEP's investment performance.

We believe CVI is well positioned to allow for potential future debt reductions and capital returns to shareholders. We are pleased with CVI's announcement of a $0.10 dividend.

Find out whether IEP delivers this. Inve re-checks your case every morning.

2 min read 6 chapters

Detailed narrative

Leadership Transition

Andrew Teno concluded his tenure as CEO, expressing gratitude for his time with the company and confidence in its future. Ted Papapostolou assumed the role of CEO, highlighting the company's unique portfolio, disciplined capital allocation, and long-term thinking. Rob Flint also transitioned into the CFO role, signaling a new leadership team for Icahn Enterprises.

Investment Fund Performance and Portfolio Highlights

The Investment segment saw its NAV increase by $201 million, primarily due to a $605 million increase in the long position in CVI, though this was partially offset by $320 million in refining hedge losses. Excluding these hedges, the Investment segment returned 4.4%. Key portfolio companies like AEP, Centuri, IFF, Caesars, and Echostar demonstrated strong stock performance and positive operational developments during the quarter, contributing to the fund's overall results.

Energy Segment Operations

The Energy segment reported an adjusted EBITDA loss of $5 million for Q1 FY26, a slight improvement from the prior year. Refining operations achieved a 97% crude utilization rate, but margins were impacted by higher RFS obligation costs and $158 million in unrealized derivative losses. The fertilizer segment, however, delivered strong results driven by robust demand during the spring planting season, positioning CVI's assets favorably for global market tightness.

Automotive Services and Real Estate Performance

Automotive Services revenues decreased by $9 million year-over-year, primarily due to store closures in 2025. Despite this, same-store sales increased by approximately 2%, indicating a positive revenue trajectory. The Real Estate segment's adjusted EBITDA increased by $18 million, largely driven by income from assets transferred from the Automotive segment, including $9 million in intercompany income and $2 million from third-party tenants.

Challenges in Other Operating Segments

Food Packaging experienced a $6 million decrease in adjusted EBITDA due to lower volume and restructuring headwinds. Home Fashion's adjusted EBITDA declined by $2 million, affected by softening demand in retail and hospitality, as well as supply chain disruptions in the Strait of Hormuz. The Pharma segment saw a $10 million decrease in adjusted EBITDA, attributed to reduced sales from anti-obesity prescriptions and increased R&D expenses for its disease-modifying designation efforts.

Liquidity and Capital Allocation Strategy

Icahn Enterprises maintained significant liquidity, with the holding company possessing $2.8 billion in cash and investments in the funds as of quarter-end. Operating subsidiaries had an additional $1.3 billion in cash and revolver availability. The company continues to prioritize building asset value and maintaining this strong liquidity position to capitalize on attractive investment opportunities both within and outside its existing operating segments.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.