Forward Air Reports Q4, Full-Year Records

Forward Air
John Sommers II for Transport Topics

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Forward Air Corp. reported record fourth-quarter and full-year revenue, operating income and net income per diluted share Feb. 8.

The Greeneville, Tenn.-based ground transportation and logistics services company posted net income of $42.9 million, or $1.60 a diluted share, for the three months ending Dec. 31. That compared with $38.2 million, $1.48, during the same time the previous year.

Total operating revenue increased by 4.6% to $481.2 million from $459.9 million.

“We had a record fourth quarter and a record year by a mile,” Forward Air CEO Tom Schmitt said. “For that, I extend my thanks to our amazing employees, independent contractors and business partners. However, we missed our own guidance for the fourth quarter of 2022 with revenue growth of 5% coming in below our guidance range of 7% to 11%.”

We had a record fourth quarter and a record year by a mile.

Tom Schmitt

Tom Schmitt

The results were also below expectations by investment analysts on Wall Street, who had been looking for $1.95 per share and quarterly revenue of $503.18 million, according to Zacks Consensus Estimate.

“We anticipated our continuing drive toward high-value freight to yield a sequentially better fourth quarter than third quarter,” Schmitt said. “We believe, however, the temporarily inflated inventory levels caused shipment sizes to fall faster and steeper than both we and our customers expected. As we mentioned in our mid-quarter update, we saw an unexpected decrease in the size of shipments from our customers with weight per shipment down more than 12%.”

Schmitt added the headwinds led to a challenging fourth quarter and likely will impact the first half until inventory levels normalize. But he anticipates shipments becoming fuller will drive volumes. He believes the service continues to make the company the most compelling choice for customers with high-value freight needs.

READ MORE: Forward Air Expands in Chicago Area With New Terminal

“Despite contending with these challenges that we believe are short-term in nature, we are growing new customers in our targeted areas,” Schmitt said. “We grew our LTL direct shipper customer count by more than 200% from fourth quarter of 2021 to fourth quarter of 2022 to over 200 direct shipper customers. Additionally, our core customers are continuing to choose us, with the number of LTL shipments in the fourth quarter of 2022 remaining stable.”

For the full year, Forward Air reported net income of $193.2 million, $7.14 a share, on revenue of $1.97 billion, compared with net income of $116.1 million, $3.85 a share, on revenue of $1.66 billion in 2021.

Expedited freight segment revenue decreased 1.1% to $372.8 million from $376.8 million during the same time the prior year. Income from continuing operations decreased 3.5% to $43.9 million from $45.5 million. Total shipments decreased 0.4% to 885,000 from 889,000. Revenue per shipment decreased 1.2% to $253.83 from $256.85. The segment includes network, truckload and final-mile operations.

• Network revenue decreased 2% to $221.8 million from $226.2 million.

• Truckload revenue decreased 16.2% to $50.3 million from $60 million.

• Final-mile increased 9% to $78.2 million from $71.7 million.

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Intermodal segment revenue increased 30% to $108.4 million from $83.4 million during the prior-year period. Income from continuing operations increased 63% to $13.9 million from $8.51 million. Drayage shipments increased 18.2% to 74,532 from 91,113 the prior year. Drayage revenue per shipment increased 65.8% to $1,288 from $777.

Forward Air ranks No. 27 on the Transport Topics Top 100 list of the largest for-hire carriers in North America and No. 1 on the Air/Expedited sector list.