Cardinal Infrastructure Stock Plunges 62% After Q3 Loss and Withdrawn Guidance

Cardinal Infrastructure Group Inc. (Nasdaq: CDNL) shares fell 62.4% on Thursday, Nov. 12, closing at $5.64 from $14.99 the previous close, on about 22.9 times normal volume, as the company reported a third-quarter net loss, withdrew its full-year guidance and postponed its planned acquisition of Hughes Brothers Construction. The S&P 500 ETF (SPY) fell 0.35% over the same session.

The company's results were released in an 8-K filed at 6:35 a.m. ET, with a press release attached. Revenue rose 65.1% to $201.9 million in the quarter, but the company recorded a net loss of $11.0 million, compared with net income of $10.1 million a year earlier. Gross margin fell to 5.4% from 15.9%.

Project estimate revisions hit margins

The company said that as more project information became available, it revised its estimated costs to complete on certain projects. Those revisions reduced gross profit by $13.2 million. Adjusted EBITDA fell to $8.5 million, a 4.2% margin, from $21.4 million and 17.5% a year earlier. The press release also cited residential pricing pressure, lower initial bid margins on some commercial and industrial work, and higher fuel and transportation costs.

Chairman and CEO Jeremy Spivey called the results "not acceptable." The company withdrew its full-year 2026 revenue and Adjusted EBITDA margin guidance and said it expects fourth-quarter Adjusted EBITDA to improve from the third quarter, without giving a specific outlook.

Hughes Brothers deal pushed back

An amendment to the merger agreement, also disclosed in the 8-K, extends the Hughes Brothers closing to no earlier than June 30, 2027. The earnout, based on the target's adjusted EBITDA for the twelve months ending June 30, 2027, will now be payable at closing. Either party may terminate the agreement before that date. The company said it wants to focus on strengthening execution across its existing operations.

Balance sheet and leadership

The company reported $335.0 million in cash and $198.5 million in total debt as of Sept. 30, and it authorized a share repurchase program of up to $50 million over the next 12 months. Its 10-Q, also filed Thursday, showed the quarterly figures in full. The 8-K also disclosed that Chief Financial Officer Mike Rowe notified the company on Nov. 9 that he will resign once a successor is appointed.