Icahn Enterprises (IEP) Q2 FY26 earnings call

Earnings call· Jun 2026 (Q2 FY26)· Aug 5, 2026

Source: earnings call transcript

Executive summary

Icahn Enterprises Q2 FY26 — Strategic Divestiture and Portfolio Optimization

Icahn Enterprises' second quarter was marked by significant portfolio optimization, highlighted by the definitive agreement to sell Pep Boys for $700 million, a move expected to bolster liquidity and address upcoming debt maturities. While the company reported a net loss and a decline in Net Asset Value primarily due to fund and CVI performance, strategic actions like the Pep Boys divestiture and ongoing segment management aim to enhance long-term value. The company continues to focus on maintaining liquidity to capitalize on future opportunities within its diversified operating segments.

Highlights

Icahn Enterprises entered a definitive agreement to sell Pep Boys for $700 million, expected to close in Q3 FY26, providing significant financial flexibility.
CVI declared a $0.10 per share dividend, reflecting confidence in its strong positioning to capitalize on energy market opportunities.
Century reported base revenue and gross profit growth of 36% and 21% respectively in Q2 FY26, with its stock up approximately 4%.
JetBlue reported solid Q2 FY26 results, growing revenue per available seat mile by approximately 11%, with its stock up approximately 30%.
Real Estate adjusted EBITDA increased by $9 million YoY in Q2 FY26, driven by assets transferred from the Automotive segment and intercompany rent from Pep Boys.

Concerns

Net Asset Value (NAV) decreased by $765 million in Q2 FY26 compared to Q1 FY26, primarily driven by a $243 million decrease in funds and a $435 million decrease in CVI.
Net loss attributable to IEP was $355 million ($0.52 per unit) in Q2 FY26, compared to a $165 million loss ($0.30 per unit) in the prior year quarter.
Adjusted EBITDA loss attributable to IEP was $134 million in Q2 FY26, a decrease from $40 million in Q2 FY25.
Investment funds had a negative return of 10.9% for the quarter (including refining hedges), with short positions contributing a negative performance attribution of 15.5%.
Pharma adjusted EBITDA decreased by $14 million YoY in Q2 FY26 due to reduced sales from generic competition and increased R&D expenses.

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Investment Funds Experienced a negative return for the quarter, primarily driven by short positions. Investment in funds was approximately $2 billion at quarter end with $741 million in cash. Negative return (excluding refining hedges): -7.7%Long positions performance attribution: +3.9%Short positions performance attribution: -15.5%Net short notional exposure at quarter end: 30%Net short notional exposure prior quarter end: 29%Net long notional exposure (excluding refining hedges) at quarter end: 23%Net short notional exposure (excluding refining hedges) prior quarter end: 2%	—	—	—	-10.9% return (including refining hedges)
Energy Adjusted EBITDA increased compared to Q2 FY25 ($40 million). Refining operations were solid despite higher RFS obligation costs. Fertilizer segment had strong results due to robust demand. CVR declared a $0.10 per share dividend. Crude utilization: over 98%	—	—	—	$102 million adjusted EBITDA attributable to IEP
Automotive Revenue decrease primarily driven by store closures in 2025, partially offset by improved pricing. Pep Boys sale expected to close in Q3, retaining AMCo and Precision 2 Auto Care franchise businesses. Same-store sales: flat	decreased by $14 million	—	—	—
Real Estate Adjusted EBITDA increased compared to prior year, driven by income from assets transferred from the Automotive segment. Expected to include over 400 owned and leased locations post-Pep Boys sale. Intercompany rent from Pep Boys: $9 millionThird-party tenants income: $2 million	—	—	—	$9 million adjusted EBITDA increase
Food Packaging Decrease primarily due to lower volume and continued disruptive headwinds from restructuring plan.	—	—	—	$2 million adjusted EBITDA decrease
Home Fashions Decrease primarily due to softening demand in hospitality business and continued supply chain disruptions.	—	—	—	$1 million adjusted EBITDA decrease
Pharma Decrease primarily due to reduced sales from generic competition in anti-obesity drug therapy and increased R&D expenses for ongoing pivotal drug trials (TRANSCEND trial).	—	—	—	$14 million adjusted EBITDA decrease

IEP operating KPIs by quarter

IEP operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change 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

Undisclosed Sale of Pep Boys business $700 million

IEP will retain owned real estate, franchise businesses (AMCo and Precision 2 Auto Care), and certain supercenter leases. Pep Boys expected to lease most locations from IEP post-closing.

Undisclosed Acquisition of a premier provider of mechanical and electrical construction services

Century announced an acquisition of a premier provider of mechanical and electrical construction services.

Undisclosed Sale of food ingredients business and portfolio of botanical extracts, vitamins, minerals, and food enhancement

IFF entered into an agreement to sell its food ingredients business and its portfolio of botanical extracts vitamins and minerals and food enhancement as part of portfolio optimization.

AT&T Completion of license purchase agreement

Echostar announced the completion of its license purchase agreement with AT&T.

Risks & headwinds

Major geopolitical developments contributing to volatility across energy markets near-term

near-term uncertainty

Mitigation:CVI is well positioned to capitalize on attractive market opportunities for the balance of 2026.

Higher RFS obligation costs weighing down refining margins Q2 FY26

margins were weighed down

Reduced sales due to generic competition in anti-obesity drug therapy Q2 FY26

$14 million decrease in Pharma adjusted EBITDA

Mitigation:Ongoing pivotal drug trials (TRANSCEND trial preparation on schedule)

Increased R&D expenses related to ongoing pivotal drug trials Q2 FY26

$14 million decrease in Pharma adjusted EBITDA

Mitigation:TRANSCEND trial preparation for PAH drug remains on schedule with one site active and patients qualified, a second site in pre-screening, and 12 additional sites in contracting.

Lower volume and continued disruptive headwinds from restructuring plan Q2 FY26

$2 million decrease in Food Packaging adjusted EBITDA

Softening demand in hospitality business and continued supply chain disruptions in the Strait of Hormuz Q2 FY26

$1 million decrease in Home Fashions adjusted EBITDA

What to watch in Q3 FY26

Pep Boys Divestiture Completion

Q3 FY26

Current Definitive agreement entered

Target Sale closed

Why it matters

The closing of this $700 million divestiture is critical for enhancing IEP's liquidity and providing flexibility to address upcoming debt maturities.

Looking ahead, we expect the sale of Pep Boys to close during the third quarter.

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

2 min read 6 chapters

Detailed narrative

NAV and Investment Fund Performance

Icahn Enterprises' Net Asset Value (NAV) saw a significant decrease of $765 million in Q2 FY26, primarily attributed to a $243 million decline in the investment funds and a $435 million decrease from CVI. The investment funds experienced a negative return of 10.9% for the quarter, largely due to a 15.5% negative performance attribution from short positions. Despite this, the company's investment in the funds remained approximately $2 billion at quarter-end, with $741 million in cash.

Strategic Divestiture of Pep Boys

The company entered a definitive agreement in July to sell Pep Boys for $700 million, subject to customary adjustments. This transaction is viewed as a successful culmination of a multi-year transformation plan, validating efforts to strengthen the business and create value. IEP will retain the owned real estate, franchise businesses (AMCo and Precision 2 Auto Care), and certain supercenter leases, with Pep Boys expected to lease most locations from IEP post-closing.

Energy Segment Resilience (CVR)

The Energy segment, primarily CVR, reported adjusted EBITDA attributable to IEP of $102 million in Q2 FY26, up from $40 million in Q2 FY25. Refining operations maintained solid crude utilization over 98%, despite higher RFS obligation costs. The Fertilizer segment delivered strong results driven by robust demand. CVI also declared a $0.10 per share dividend, and management believes it is well-positioned to benefit from global tightness in refined products and nitrogen fertilizer.

Automotive Segment Transition

Q2 FY26 Automotive service revenues decreased by $14 million year-over-year, mainly due to store closures in 2025, partially offset by improved pricing. Same-store sales were flat. Following the Pep Boys sale, the retained AMCo and Precision 2 Auto Care franchise businesses are expected to offer significant long-term value, and certain supercenter leases will integrate into the Real Estate segment, with Pep Boys becoming a primary tenant.

Performance of Other Operating Segments

Real Estate's adjusted EBITDA increased by $9 million YoY, benefiting from transferred automotive assets and intercompany rent. Food Packaging's adjusted EBITDA decreased by $2 million due to lower volume and restructuring headwinds. Home Fashions saw a $1 million decrease in adjusted EBITDA from softening hospitality demand and supply chain disruptions. Pharma's adjusted EBITDA decreased by $14 million, impacted by generic competition for its anti-obesity drug and increased R&D for ongoing pivotal drug trials, including the TRANSCEND trial for its PAH drug.

Liquidity and Capital Allocation

Icahn Enterprises maintains substantial liquidity, with $2.4 billion at the holding company and $1.4 billion in cash and revolver availability at its subsidiaries as of quarter-end. Subsequent to quarter-end, holding company liquidity was approximately $2 billion. The proceeds from the Pep Boys sale are expected to further enhance liquidity, providing flexibility to address upcoming 2027 debt maturities and capitalize on future investment opportunities.

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