Forward Air expects lower earnings

Forward Air Corp. said it is cutting its fourth quarter earnings estimate due to severely worsening economic conditions encountered during the second half of the fourth quarter.   Forward Air, which plans to report its financial results for the fourth quarter and full year 2008 on Feb. 9, said it was lowering its fourth quarter estimate to 27 cents to 29 cents per share from 40 cents to 44 cents.

The earnings shortfall was primarily driven by a further, significant deterioration in airport-to-airport tonnage over the course of the quarter,said Bruce A. Campbell, chairman, president and chief executive officer. Like most others in the industry, we reported during our third quarter earnings call that tonnage had begun to decrease midway through the third quarter. This tonnage decline intensified throughout the fourth quarter, with December's tonnage decline being by far the largest. We ended the quarter with a 14 percent tonnage decline as compared to the fourth quarter of 2007. Additionally, we experienced less than anticipated profits in our Forward Air Solutions segment, driven by the impact that the poor economic conditions had on retail sales.   Forward Air provides the air cargo industry with time definite ground transportation services through a network of 83 terminals located on or near major airports in the United States and Canada as a cost-effective alternative to air transportation of cargo. It also provides pool distribution services where it pools, less-than-truckload shipments through a network of some 20 terminals within the mid-Atlantic, Southeast, Midwest and southwestern United States.

Rodney L. Bell, chief financial officer and senior vice president, added that while the company was very disappointed with the results of the quarter, we were encouraged to see that even in December, which was one of the worst operating months in our history, we had profitable operating results and generated positive cash flow. We ended 2009 with just over $22 million in cash and $50 million available on our $100 million line of credit. This strong liquidity position will continue to provide us with the ability to take advantage of the opportunities that tend to arise during difficult times.

Source: American Shipper