Lineage Inc (NASDAQ:LINE), the world's largest temperature-controlled warehouse real estate investment trust, reported financial results for the fourth quarter and full year of 2025 that presented a mixed picture, leading to a negative reaction in pre-market trading. The company's performance against analyst expectations and its forward-looking guidance for 2026 appear to be the primary drivers of investor sentiment.
Earnings Versus Estimates
The fourth-quarter results revealed significant deviations from Wall Street forecasts, particularly on the bottom line. While revenue came in slightly below expectations, the miss on earnings per share was more pronounced.
- Revenue: The company reported Q4 revenue of $1.336 billion. This fell short of the analyst consensus estimate of approximately $1.406 billion.
- Earnings Per Share (EPS): On a non-GAAP basis, which the company refers to as Adjusted Funds From Operations (AFFO) per share, Lineage reported $0.83. This result starkly contrasted with the analyst estimate for a loss of $0.12 per share, representing a substantial positive surprise.
For the full year 2025, total revenue remained essentially flat at $5.355 billion. The company reported a GAAP net loss of $113 million, or $0.43 per diluted share. However, the more closely watched AFFO metric told a different story, increasing 22.7% to $865 million, with AFFO per share rising 2.4% to $3.37.
Market Reaction and Guidance
The market's immediate reaction, as indicated by pre-market trading, was negative. This downturn suggests that investors are focusing on elements beyond the headline EPS beat. A key factor is likely the company's newly initiated guidance for the full year 2026, which projects a year-over-year decline in its key profitability metrics.
Lineage expects 2026 Adjusted EBITDA in a range of $1.25 to $1.30 billion and AFFO per share between $2.75 and $3.00. This outlook compares to 2025 results of $1.298 billion in Adjusted EBITDA and $3.37 in AFFO per share, implying a potential decrease. This guidance also sits below current analyst sales expectations of $5.594 billion for 2026, though direct EPS comparisons are complicated by differing metrics.
The guidance reflects what CEO Greg Lehmkuhl described as a "disciplined approach" in the face of "challenging industry conditions," emphasizing cost control, capital expenditure management, and operational efficiency.
Press Release Summary
The earnings release highlighted several key points for the period:
- Operational Focus: Management emphasized strong execution, improved warehouse utilization, and cost management throughout the year.
- Segment Performance: The company operates through two primary segments: Global Warehousing and Global Integrated Solutions, with detailed results showing the performance of same-store and non-same-store properties.
- Balance Sheet & Dividend: The company ended the year with a sizable portfolio of property and equipment ($11.3 billion net) and significant long-term debt ($6.1 billion). A quarterly dividend of $0.5275 per share was declared, maintaining an annualized rate of $2.11.
- Non-GAAP Metrics: As a REIT, the report heavily features non-GAAP measures like AFFO, Adjusted EBITDA, and NOI (Net Operating Income), which are considered critical for evaluating operational cash flow and real estate performance.
The divergence between a strong quarterly AFFO beat and a conservative, lowered outlook for 2026 has created uncertainty, which is being reflected in the stock's pre-market movement. Investors are now weighing the company's demonstrated ability to manage costs and drive efficiency against its cautious projection for the year ahead.
For a detailed history of Lineage's earnings results and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
