Forward Air 2025 Q1 Earnings Narrowed Losses with Net Income Improving by 31.1%

Forward Air (FWRD) reported its fiscal 2025 Q1 earnings on May 7th, 2025. The company showed significant improvement compared to the previous year, narrowing its net loss by 31.1% to $61.19 million. While last year the company experienced losses of $88.79 million, this quarter's results highlight a positive trend. The company did not provide specific EPS guidance but remains optimistic about its future growth, targeting $5 billion in revenue over the next five years.

Revenue

Forward Air reported a 13.2% increase in total revenue, reaching $613.28 million in Q1 2025, compared to $541.81 million in Q1 2024. The Expedited Freight segment generated $227.20 million, while Omni Logistics contributed $323.47 million. Intermodal operations added $62.47 million, and the Corporate segment recorded $142,000, leading to a consolidated total of $613.28 million.

Earnings/Net Income

Forward Air reduced its losses to $1.68 per share in Q1 2025, showing a 40.2% improvement from a loss of $2.81 per share in Q1 2024. The company's net loss narrowed to $61.19 million, marking a 31.1% reduction compared to the previous year. The improved EPS reflects a positive shift toward financial recovery.

Price Action

The stock price of Forward Air has edged down 0.58% during the latest trading day, has surged 17.05% during the most recent full trading week, and has surged 31.33% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Forward Air (FWRD) shares after a revenue increase quarter-over-quarter and holding for 30 days has not performed well over the past five years. This strategy yielded a return of -0.45%, significantly underperforming the benchmark return of 84.08%. The excess return was -84.54%, and the Sharpe ratio was -0.01, highlighting the strategy's inability to generate positive returns or risk-adjusted benefits. With a maximum drawdown of -14.57% and a volatility of 10.48%, the strategy is marked by high risk and potential losses. These results underscore the challenges in identifying effective trading strategies for Forward Air, particularly in a volatile market environment.

CEO Commentary

Shawn Stewart, Chief Executive Officer, emphasized Forward Air's strong performance in Q1 2025, reporting a consolidated EBITDA of $69 million and positive free cash flow of $28 million. Stewart highlighted the company's ongoing transformation and integration of legacy businesses with a goal to double revenue to $5 billion over five years. Despite market volatility, he expressed confidence in the company's positioning, service quality, and effective cost management as key growth drivers.

Guidance

Stewart indicated expectations for continued improvement in pricing and operational performance, aiming for $5 billion in revenue over the next five years. Although specific EPS guidance was not provided, maintaining strong liquidity, which stood at $393 million at the end of Q1 2025, remains crucial. The outlook is cautiously optimistic amid macroeconomic uncertainties, with a focus on leveraging integrated service offerings and improving margins.

Additional News

In recent weeks, Ancora Holdings Group issued a letter to Forward Air shareholders, urging them to vote against three board members due to concerns over their M&A track records and perceived hindrance to strategic reviews. Ancora, holding a 4.1% stake in Forward Air, criticized the board's handling of the Omni Logistics acquisition and the slow progress on strategic alternatives. Additionally, Forward Air has nominated a new director as part of a board refreshment process, aiming to enhance governance and strategic oversight. Lastly, Barclays PLC has recently trimmed its stake in Forward Air, reflecting ongoing adjustments in institutional holdings.