What Happened?
Shares of infrastructure investment and operations firm FTAI Infrastructure (NASDAQ: FIP) fell 16.6% in the morning session after the company reported disappointing second-quarter financial results, with both revenue and earnings per share falling significantly short of analyst expectations. The infrastructure firm reported a loss of $0.73 per share for the second quarter, which was significantly worse than the analyst consensus estimate for a loss of only $0.37 per share. Revenue also fell short, coming in at $122.3 million against expectations of $135.6 million. Furthermore, Adjusted EBITDA of $45.92 million missed forecasts by 21.5%. While the company highlighted a strong 44.1% year-over-year increase in revenue, the substantial misses on key profitability metrics appeared to drive the negative investor sentiment.
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What Is The Market Telling Us
FTAI Infrastructure’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. But moves this big are rare even for FTAI Infrastructure and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 3.3% on the news that the company announced an agreement to acquire The Wheeling & Lake Erie Railway Company for $1.05 billion in cash. The acquired company, The Wheeling & Lake Erie Railway, was a Class II regional freight railroad. To finance the purchase and refinance existing debt, FTAI Infrastructure secured commitments for $2.25 billion in total capital. This financing included $1.25 billion in new debt and $1 billion in preferred stock. The company's CEO stated that growing its freight rail platform was a key focus, and the deal added scale and diversification. Investors also learned the company expected the combined freight business to generate approximately $200 million of annual Adjusted EBITDA by the end of 2026.
FTAI Infrastructure is down 26.3% since the beginning of the year, and at $5.37 per share, it is trading 46% below its 52-week high of $9.94 from August 2024. Investors who bought $1,000 worth of FTAI Infrastructure’s shares at the IPO in July 2022 would now be looking at an investment worth $1,788.
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