Forward Air CEO: ‘If there is a recession, bring it on’
Asset-light trucking provider Forward Air raised its full-year outlook again. The company beat second-quarter expectations and sees several tailwinds that will contribute to higher earnings in the future.
Forward (NASDAQ: FWRD) reported its highest-ever quarterly earnings Wednesday after the market closed. Earnings per share of $2.04 in the second quarter was 21 cents ahead of the consensus estimate and 94 cents better than the year-ago result. It also outpaced management’s initial guidance range of $1.59 to $1.63. Management raises guidance again. On a call with analysts Thursday morning, Chairman, President and CEO Tom Schmitt talked through the catalysts behind Forward’s latest guidance raise.
He said events like trade shows, concerts and cruises, which have historically represented a big share of the company’s profitability, are continuing to increase in frequency and are expected to step higher again next year. These are high-margined pieces of business that often involve multiple shipments of the same freight.
“People are thirsting for events,” Schmitt said. “They are thirsting to fly; they are thirsting to take a cruise and to go to a concert.”
Forward is no longer solely working through domestic forwarders for events freight. It’s also selling its service directly to small events companies. Schmitt said bypassing the intermediaries and selling directly to small and midsize shippers has helped improve Forward’s freight profile and margins across all its modes. He previously stated margins double when cutting out the middleman.
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