Forward Air Narrows Loss in Q1 as Revenue Declines 5.1%

Forward posted a $40.2 million net loss for the three months ended March 31, narrower than the prior-year loss. (Forward Air Corp.)

Forward Air Corp. noted first-quarter headwinds, plus the loss of a major portion of business, while reporting financial results May 7.

The Greeneville, Tenn.-based company said total revenue decreased 5.1% to $582.1 million from $613.3 million. This comes toward the end of a review process aimed at maximizing shareholder value, that could include a sale, merger or sale of non-core assets. The review followed investor dissatisfaction regarding the acquisition of Omni Logistics.

Forward also posted a net loss of $40.2 million, or a loss of $1.09 per diluted share, for the three months ended March 31. That compared with a loss of $61.2 million, or a loss of $1.68, a year earlier.

Forward ranks No. 37 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 1 on the air/expedited carriers sector list. Forward/Omni ranks No. 33 on the TT Top 100 list of the largest logistics companies.

The carrier launched a strategic review early last year as it sought to address investor concerns and explore ways to improve shareholder returns, CEO Shawn Stewart said. “In January 2025, the board initiated a comprehensive review of strategic alternatives to maximize shareholder value.”

Stewart added that this review has recently refocused on offsetting the impact of a major customer transitioning a significant portion of its business to other providers. How much of the business will be transitioned and the timing, he noted, are still being discussed.

Stewart said the strategic review did not produce any viable offers to sell the company, prompting Forward to shift its focus toward selling non-core assets instead.

He added that those sales are intended to advance efforts to deliver balanced financials and focus services around the core business, such as service-sensitive logistics for air, ocean, ground and contract logistics customers. In the meantime, he pointed out that the company has had to navigate a weak industry backdrop, evolving tariffs and geopolitical disruptions.

“Domestic transportation supply has continued to tighten, driven in large part by increased regulatory and enforcement actions over the past year,” Stewart said. “These dynamics have accelerated carrier exits, particularly among smaller operators, while limiting capacity additions.”

Forward Air Corp. Q1 2026 earnings report

Stewart expressed optimism that the tightening supply environment is supporting a return to more favorable market dynamics by rebalancing the freight market. But he tempered that by pointing out that supply is only one side of the equation, with demand also needing to improve.

“Improvement in demand will ultimately determine the pace and sustainability of a recovery,” Stewart said. “Encouragingly, early indicators suggest that the industrial economy, which is weighed on freight demand, may be approaching an inflection point.”

Stewart also pointed out that the ratio of inventory to sales continues to decline, and that there has been a recent increase in truckload spot rates and tender rejections.

He also cautioned that macroeconomic risks remain, including market uncertainty around ongoing tensions in the Middle East and the associated rise in fuel prices. He warned that sustained increases in energy costs could pressure manufacturers and consumers.

“If elevated fuel prices persist, they could lead to tempered demand,” Stewart said. “While we are optimistic about the improving freight dynamics, we remain focused on prioritizing customer service and thoughtful cost management.”

Results by Segment

• Expedited Freight: Revenue increased 9.4% to $272.7 million from $249.3 million. Income from operations increased 28.8% to $20.1 million from $15.6 million.
• Omni Logistics: Revenue decreased 6.5% to $302.4 million from $323.5 million. Income from operations decreased 78.4% to $730,000 from $3.38 million.
• Intermodal: Revenue decreased 15% to $53.1 million from $62.5 million. Income from operations decreased 78% to $1.22 million from $5.54 million.

Susquehanna International Group noted in a report that the share price cratered in response to the disappointing strategic news of losing a major customer. But the trading and technology firm also noted that Forward has line of sight to initial margin and non-core Omni business divestitures of about $390 million. It still expects upside with divestiture in the short term.

“FWRD’s announcement yesterday might not be as bad as the stock reaction,” SIG analyst Harrison Bauer wrote in the report. “Shareholders were blindsided — less so by the partial-disposal route (a legitimate potential after being flagged in February as alternative to full-take private) and more so disclosure that expected take-private didn’t materialize.”

Bauer added that this was due in part to that potential loss of a major customer. He highlighted that management did not rule out the possibility of retaining some of the business given recent wins that could backfill potential losses in 2027. But he warned that the real risk going forward will be company leaders ensuring they don’t trip up the financial rules of the Omni merger.

“Ultimately, with the customer transition not impacting 2026, management has adequate runway to execute additional cost-out and either prevent incremental business loss or backfill it with new wins, keeping leverage clear at required levels,” Bauer wrote.