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Why Forward Air Shares Flew Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of transportation logistics company Forward Air (Nasdaq: FWRD  ) shot up as much as 11% following the release of its third-quarter-earnings report.

So what: For the quarter, Forward Air actually reported a slight decline in EPS over the previous year to $0.41 from $0.44 on a 6% rise in revenue; however, that was enough to surpass Wall Street's EPS expectations by $0.01. Investors seem more pleased than anything that Forward Air was able to beat expectations considering that it lowered its third-quarter projections just four weeks ago on weak tonnage shipping figures.

Now what: I wouldn't put too much emphasis into today's numbers as Forward Air's management has made it very clear that freight visibility is minimal at best. In addition, Forward Air's weakness is only compounded by the fact that FedEx (NYSE: FDX  ) recently lowered its earnings forecast. As a prime indicator of economic health, it's unlikely that Forward Air is going to outperform if FedEx isn't on top of its game. I'm perfectly happy waiting this one out on the sidelines.

Craving more input? Start by adding Forward Air to your free and personalized Watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

Motley Fool newsletter services have recommended buying shares of FedEx. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Related Tickers

10/21/2016 4:02 PM
FDX $170.20 Up +0.50 +0.29%
FedEx CAPS Rating: ****
FWRD $41.09 Down -0.31 -0.75%
Forward Air CAPS Rating: **