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Tariffs are creating uncertainty in the global food production chain, causing shippers to pause or delay major decisions, officials at Lineage Inc. said in announcing their first-quarter financial results.
The Novi, Michigan-based global cold storage warehouse operator released results Wednesday before the market opened and held a call with analysts to discuss quarterly earnings.
“It’s just the unknown and the uncertainty of the tariffs,” President and CEO Greg Lehmkuhl said on the call. “We’re all over the world. We support consumption in all the major markets in which we operate, but our customers are telling us they’re not sure what they’re going to do. They don’t know where they’re going to build inventories. They don’t know how they’re going to direct trade flows. That could have a short-term disruption, even though we’re very confident we’ll support their needs in the medium and long term.”
Lineage (NASDAQ: LINE) had revenue of $1.29 billion and earnings per share of 86 cents in the first quarter.
In comparison, first quarter revenue in 2024 totaled $1.32 billion, while earnings per share totaled 81 cents.
The company missed Wall Street analysts’ revenue estimates of $1.34 billion in the first quarter but beat earnings-per-share expectations of 82 cents.
Lineage manages more than 480 facilities with 3 billion cubic feet of space across North America, Europe and the Asia-Pacific region. It also provides freight forwarding, customs brokerage, drayage and truck transportation.
During the call, Lineage officials announced a strategic agreement to acquire multiple, existing cold storage warehouses in the U.S. from Tyson Foods. (NYSE: TSN).
“In total, we expect to deploy approximately $1 billion of capital in the coming years on the acquisition and new retail development that once stabilized will generate over $100 million in annual income,” Lehmkuhl said.
Lineage will acquire and take over operations of four existing cold storage warehouses that comprise about 49 million cubic feet and have 160,000 pallet positions. Those facilities are in Pottsville, Pennsylvania; Olathe, Kansas; Rochelle, Illinois; and Tolleson, Arizona.
Tyson Foods will occupy the warehouses as the anchor customer. Following the acquisition, Lineage plans to onboard over 1,000 of Tyson Foods’ employees.
The transaction is expected to close in the second quarter.
As part of the Tyson agreement, Lineage also plans to develop two fully automated cold storage warehouses for $740 million. The developments will add more than 80 million cubic feet and nearly 260,000 pallet positions to the company’s network.