Icahn Enterprises Q2 Earnings Call Highlights

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Second-quarter results worsened: Icahn Enterprises reported a $355 million net loss, or $0.52 per depositary unit, compared with a $165 million loss a year earlier. Adjusted EBITDA swung to a $134 million loss from $40 million of positive EBITDA.

Pep Boys sale expected to improve liquidity: IEP agreed to sell Pep Boys for $700 million, with closing expected in the third quarter. Proceeds will partly address upcoming debt maturities, while IEP retains related real estate, franchise businesses and certain liabilities.

Investment-fund losses weighed on NAV, while energy improved: The funds posted a negative 7.7% return excluding refining hedges, contributing to a $765 million quarterly NAV decline. Energy adjusted EBITDA rose to $102 million from $40 million, helped by strong refining utilization and fertilizer demand.

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Icahn Enterprises (NASDAQ:IEP) reported a second-quarter 2026 net loss attributable to the company of $355 million, or $0.52 per depositary unit, compared with a $165 million loss, or $0.30 per unit, a year earlier. Adjusted EBITDA attributable to IEP was a loss of $134 million, compared with adjusted EBITDA of $40 million in the prior-year quarter.

President and CEO Ted Papapostolou said indicative net asset value declined by $765 million from the first quarter, primarily reflecting a $243 million decrease in the investment funds and a $435 million decline at CVI. The second-quarter NAV included an estimated gain of about $100 million from the anticipated sale of Pep Boys.

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Updating market-value subsidiaries and investments through July, Papapostolou said NAV increased by $268 million, as a $575 million increase at CVI more than offset an approximately $312 million decline in the funds.

In July, IEP entered a definitive agreement to sell Pep Boys for $700 million, subject to customary closing conditions and purchase-price adjustments. The company expects the transaction to close during the third quarter.

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IEP will retain real estate previously transferred from Pep Boys, along with the AAMCO and Precision Tune Auto Care franchise businesses and certain retained liabilities, including Supercenter leases. Pep Boys is expected to lease most of the retained locations from IEP following the closing.

"This transaction represents the culmination of years of hard work and disciplined execution," Papapostolou said, describing the sale as a validation of the company's multiyear transformation plan for the automotive business.

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The company said it expects to use a portion of sale proceeds to address upcoming debt maturities. CFO Robert Flint said the real estate segment is expected to include more than 400 owned and leased locations after the transaction closes, with Pep Boys serving as the primary tenant. For assumed Supercenter locations, Pep Boys will sublease its operating space while IEP may lease excess space to third-party tenants.

The board declared an unchanged quarterly distribution of $0.50 per depositary unit.

IEP's investment funds generated a negative return of 7.7% during the quarter excluding refining hedges, and a negative return of 10.9% including those hedges. Long positions contributed positive performance attribution of 3.9%, while short positions had negative attribution of 15.5%.

The funds had net short notional exposure of 30% at quarter-end, compared with 29% at the end of the first quarter. Excluding refining hedges, the funds had net long notional exposure of 23%, compared with net short exposure of 2% at the prior quarter-end. IEP's investment in the funds totaled about $2 billion at quarter-end, including approximately $741 million in cash.

The energy segment's adjusted EBITDA attributable to IEP rose to $102 million from $40 million a year earlier. Flint said refining operations posted crude utilization above 98%, though margins were pressured by higher Renewable Fuel Standard obligation costs. The fertilizer business benefited from strong spring planting-season demand.

Papapostolou said CVI underwent a leadership transition following its CEO's departure for personal reasons, but added that the company's experienced management bench enabled a seamless transition. He said geopolitical developments continued to create energy-market volatility but also could create attractive opportunities during the remainder of 2026. CVI declared a $0.10 per-share dividend.

Automotive service revenue declined by $14 million from the prior-year quarter, primarily due to store closures during 2025, partly offset by improved pricing. Same-store sales were flat.

Real estate adjusted EBITDA increased by $9 million, driven by income from assets transferred from automotive. That included $9 million of intercompany rent from Pep Boys and $2 million from third-party tenants. Food packaging adjusted EBITDA declined by $2 million amid lower volume and restructuring-related disruption, while home fashions EBITDA fell $1 million due to softer hospitality demand and supply-chain disruption in the Strait of Hormuz.

Pharma adjusted EBITDA decreased by $14 million, reflecting lower sales amid generic competition in its anti-obesity drug therapy and higher research and development spending. Flint said preparations for the TRANSCEND trial for the company's PAH drug remained on schedule.

At quarter-end, the holding company had $2.4 billion of cash and investments in the funds, while subsidiaries had $1.4 billion of cash and revolver availability. After the quarter ended, the company's investment in the funds fell to approximately $1.7 billion as of the end of July, resulting in holding-company liquidity of roughly $2 billion, Flint said.

Icahn Enterprises L.P. (NASDAQ: IEP) is a diversified holding company based in New York City. Controlled by veteran investor Carl C. Icahn, the partnership makes strategic investments and owns wholly or partially controlled subsidiaries across a broad range of industries. With a flexible capital structure, Icahn Enterprises seeks to generate long-term value through active ownership, asset optimization and operational improvements.

The company reports its activities through five principal business segments.

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