Lineage shares fall 12.1% after Q3 revenue misses estimates

Lineage (LINE) reported third-quarter revenue of $1.36 billion, below the $1.39 billion consensus estimate, and lowered its full-year 2026 adjusted EBITDA forecast.

Shares fell 12.1% at 3:59 p.m. ET, from a $39.66 close.

Adjusted EBITDA fell 7.0%, and its margin narrowed 150 basis points to 23.3%.

Here's how the company did:

• Revenue: $1.36 billion vs. $1.38 billion a year earlier, below the $1.39 billion consensus estimate
• Net loss: $173 million, or 68 cents per share, vs. a loss of $112 million, or 44 cents, a year earlier
• Adjusted EBITDA: $317 million vs. $341 million a year earlier
• AFFO per share: 73 cents vs. 85 cents a year earlier

The quarter included a $105 million loss on property destruction and $109 million in restructuring, impairment and disposal charges, against a $5 million gain a year earlier.

Guidance

Lineage now expects full-year 2026 adjusted EBITDA of $1.25 billion to $1.27 billion, down from $1.26 billion to $1.29 billion on Aug. 5.

Its AFFO per share forecast is $2.86 to $2.98, narrowed from $2.80 to $3.05 on Aug. 5.

The Big Bear solar fire is expected to lower total warehouse NOI and adjusted EBITDA by $20 million.

Greg Lehmkuhl, president and chief executive officer, said pressures will continue into the fourth quarter: "We view them as cyclical rather than a change in our trajectory."

Segment results

Global Warehousing revenue was $1.01 billion, down 0.4%. Same warehouse NOI fell 4.2%, while same warehouse physical occupancy rose 110 basis points to 76.2%.

Power costs in the warehousing segment rose 11.3%, mainly from solar de-energization following the Big Bear incident.

Global Integrated Solutions revenue fell 3.3% to $352 million, and segment NOI dropped 13.8%. Margins are expected to recover as contracts reset, after carrier costs rose faster than repricing.

Costs and capital

Interest expense, net rose to $92 million from $68 million.

Growth capital invested was $108 million, mainly in development projects. An incremental $130 million of NOI is expected once that pipeline stabilizes.

Lineage declared a quarterly dividend of 53.25 cents per share, an annualized $2.13 per share.

Balance sheet

Total debt was $6.8 billion at the end of September, and net debt to last-twelve-month adjusted EBITDA was 6.4 times.

Total liquidity was about $371 million: $58 million of available cash and about $313 million of revolving credit capacity.

For the first nine months, revenue was $4.02 billion, the same as a year earlier.