Please ensure Javascript is enabled for purposes of website accessibility

Why Forward Air Shares Fell Backward

By Jeremy Bowman – Updated Apr 7, 2017 at 11:47AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful? Or just another movement?

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: Commercial transportation specialist Forward Air (Nasdaq: FWRD) was spinning its wheels today, dropping 11% today after management cut third-quarter guidance.

So what: The quarterly forecast was cut sharply, down from a range of $0.47 to $0.51 a share to a range of $0.39 to $0.41, well below the average estimate of $0.49. CEO Bruce Campbell said the quarter had started off strongly but that airport-to-airport tonnage began to decrease in August. A rate increase imposed on September also failed to deliver the results he had expected.

Now what: Forward Air's announcement echoes Fed Ex's (NYSE: FDX) decision last week to cut its full-year outlook by about 10%, as the shipping king said the global economy is slowing. Caterpillar (NYSE: CAT), another bellwether for the global economy, also sent negative signals yesterday. With management making this announcement right as the quarter is ending, investors may want to play it cool. If the heavyweights are right about the cooling of the economy, Forward Air could be forced to cut guidance again in Q4. Right now, analysts are calling for $0.58 a share in the last three months of the year.

For more information on Forward Air, just add the company to your Watchlist.

And for any Caterpillar shareholders or prospective ones, pick up a copy of our brand-new premium report, which details all of the opportunities and threats facing the machinery maker. You can get access now by clicking right here.

Fool contributor Jeremy Bowman holds no positions in the companies in this article. Motley Fool newsletter services have recommended buying shares of FedEx. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Forward Air Corporation Stock Quote
Forward Air Corporation
FWRD
$90.26 (-1.70%) $-1.56
Caterpillar Inc. Stock Quote
Caterpillar Inc.
CAT
$164.08 (-1.10%) $-1.82
FedEx Corporation Stock Quote
FedEx Corporation
FDX
$148.47 (-2.52%) $-3.84

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.