What Icahn Enterprises (IEP) Said on Its Q3 Earnings Call

Key Points

• Q3 results deteriorated sharply: Icahn Enterprises reported a $225 million net loss and a $214 million adjusted EBITDA loss, largely due to investment-fund losses, including a 31.3% negative return when refining hedges were included.
• Energy performance strengthened: Energy-segment adjusted EBITDA rose to $404 million, while CVI pursued a $4.2 billion refinery acquisition supported by a potential $500 million IEP backstop.
• Liquidity and distributions remained stable: IEP ended the quarter with $2.3 billion in holding-company cash and fund investments, completed the Pep Boys sale for $645 million, and maintained its $0.50-per-unit quarterly distribution.

Icahn Enterprises NASDAQ: IEP reported a third-quarter net loss of $225 million, or $0.31 per depositary unit, compared with net income of $287 million, or $0.49 per unit, in the prior-year period, as losses in its investment funds weighed on results despite stronger performance in its energy segment.

Adjusted EBITDA attributable to Icahn Enterprises was a loss of $214 million for the third quarter of 2026, compared with adjusted EBITDA of $75 million a year earlier, Chief Financial Officer Robert Flint said during the company’s earnings call.

President and CEO Ted Papapostolou said indicative net asset value rose by $865 million from the second quarter. The increase was primarily driven by a $1.7 billion increase in the value of the company’s long position in CVI, partly offset by a $522 million decline tied to losses on refining hedges within the investment funds.

Papapostolou added that October began positively, with net asset value increasing due to a $525 million gain in CVI and an approximately $60 million increase from the funds.

Investment Funds Reported Losses

Icahn Enterprises’ investment funds generated a negative 5.5% return during the quarter excluding refining hedges. Including those hedges, the funds posted a negative return of 31.3%.

Long positions produced a net negative performance attribution of 7.8%, while short positions had a negative performance attribution of 24.3%, Flint said. The funds had net short notional exposure of 7% at the end of the quarter, compared with net short exposure of 30% at the end of the previous quarter.

Excluding refining hedges, the funds had net long notional exposure of 57% at quarter-end, up from net long exposure of 23% at the end of the second quarter. Icahn Enterprises’ investment in the funds was approximately $1.4 billion at quarter-end, including approximately $334 million in cash.

Among the company’s cited investment holdings, Papapostolou said Centuri reported double-digit growth in pipeline and sales during its second quarter, though its shares declined approximately 34% during the third quarter. International Flavors & Fragrances continued executing its plan, announced the sale of its Food Ingredients business and authorized a $2.5 billion share-repurchase program; its shares rose approximately 5% during the quarter. Caesars reported continued positive performance in its regional and digital businesses, while its shares declined approximately 2%.

Energy Results Strengthen as CVI Pursues Acquisition

Energy segment adjusted EBITDA attributable to Icahn Enterprises rose to $404 million in the third quarter from $98 million in the prior-year quarter. Flint said CVR recognized record second-quarter earnings, supported by strong refining operations and record crack spreads in the Mid-Continent region.

The company also cited a 100% small-refiner waiver received at the Wynnewood Refinery. In fertilizer, results were negatively affected by the East Dubuque turnaround, though Flint said the facility is back online and positioned to benefit from tight nitrogen supplies and the fall ammonia application season.

Papapostolou highlighted CVI’s announced $4.2 billion acquisition of two refineries and a marketing platform. The purchase price was less than 3.5 times management’s estimate of 2026 EBITDA, he said. For the nine months ended Sept. 30, 2026, the transaction would have increased CVR EBITDA by more than $1 billion and lifted earnings per share by more than 105% on a pro forma basis, according to Papapostolou.

Icahn Enterprises committed to provide a $500 million backstop for the transaction, though Papapostolou said the commitment would be reduced dollar-for-dollar by CVI’s equity offering and is not expected to be needed. He said the related secondary equity transaction is intended to improve CVI share liquidity and trading volume while providing additional liquidity to Icahn Enterprises.

CVR also announced a $0.10 dividend, Flint said.

Pep Boys Sale and Other Segment Updates

During the quarter, Icahn Enterprises completed the sale of Pep Boys, receiving $645 million in proceeds and recording a pre-tax gain of $215 million. The automotive segment’s results included Pep Boys operations through the Aug. 19 closing date.

Automotive service revenue declined by $175 million from the prior-year quarter, primarily because of the sale. Revenue from the company’s retained automotive businesses, which primarily consist of royalty income from franchising operations, was flat from the prior quarter.

Real estate adjusted EBITDA rose by $11 million year over year, mainly due to income from assets transferred from the automotive segment. The real estate unit assumed certain operating leases in connection with the Pep Boys sale and plans to continue leasing vacant space.

• Food packaging adjusted EBITDA increased by $2 million, driven by higher volumes and improved price and product mix associated with reduced waste.
• Home fashion adjusted EBITDA was unchanged from the prior-year period despite softer hospitality demand and supply-chain disruptions in the Strait of Hormuz.
• Pharma adjusted EBITDA declined by $4 million, reflecting lower sales amid generic competition for its anti-obesity drug therapy and higher research and development spending for pivotal trials.

Flint said preparation for the TRANSCEND trial of the company’s PAH drug remained on schedule, with four sites active and patient screening underway.

Liquidity and Distribution

At quarter-end, the holding company had $2.3 billion in cash and investments in the funds, while operating subsidiaries had $582 million of cash and revolver availability. Papapostolou said the company has senior notes maturing in May 2027 that may become callable at par beginning Nov. 15, and expects to address the notes in the coming months.

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

About Icahn Enterprises (NASDAQ:IEP)

Icahn Enterprises L.P. NASDAQ: IEP is a diversified holding company managed by Icahn Capital LP. Its activities include making investments in public and private companies, pursuing activist investment strategies, and owning and operating businesses across several industries. The company is controlled by investor Carl C. Icahn, who serves as its chairman.

Its operating businesses have included petroleum refining and the production of nitrogen fertilizers through CVR Energy and CVR Partners, automotive parts distribution and repair services through Icahn Automotive, food packaging through Viskase Companies, and metal recycling through PSC Metals.

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