It has been a tough year for Forward Air (NASDAQ:FWRD) investors, but the company's latest results provide some evidence that the company is finally moving in the right direction.
Investors are taking notice, sending Forward shares up 20% as of noon ET.
Pulling out of a ditch
Forward Air has been driving through potholes over the last year. The transportation company has been on the defensive since last year, when it announced its intention to acquire Omni Logistics. The deal raised objections from activist investors, who argued that Forward Air was overpaying.
The deal closed in January, but it weighed heavily on Forward results, leading to the April ouster of CEO Tom Schmitt. New CEO Shawn Stewart is tasked with rebuilding the company and its reputation with investors. The most recent quarter suggests he is having the desired impact.
Forward lost $23.29 per share in the quarter, including one-time charges related to restructurings. Revenue nearly doubled, going to $643.7 million from $333.6 million a year ago thanks to the Omni deal. There was no consensus analyst estimate for earnings per share, but the revenue number came in about $1 million short of expectations.
The underlying trends were positive. Forward increased non-GAAP (generally accepted accounting principles) earnings before interest, taxes, depreciation, and amortization (EBITDA) from $55 million in the first quarter to $81 million in the second. The company is also working to deliver its balance sheet.
"We have recently closed several exciting sales wins, and operationally, we are laser-focused on capturing the previously announced synergies, as well as other additional cost-saving opportunities that were not previously identified," Stewart said. "Our achievements in such a short period of time have only added to my confidence in our combined ability to build on the strengths of our legacy companies."
Is Forward stock a buy?
Even with Thursday's jump, Forward shares are still 75% below where they were last summer. Economic uncertainty is weighing on shipping demand, creating difficult conditions for Forward to navigate even without its internal issues, but the company appears to be headed in the right direction.
If Stewart can get Forward operating to its potential, the stock still has a lot of clear highway to accelerate from here. That's no easy task, but investors have reason to be intrigued following these strong operational results.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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