Why direct air stock is on the rise today

It’s been a tough year for Air forward (FWRD 21.51%) investors, but the company’s latest results provide some evidence that the company is finally moving in the right direction.

Investors are taking note, sending shares Forward 20% as of noon ET.

Coming out of a ditch

Forward Air has been driving through the pits for the past year. The shipping company has been on the defensive since last year, when it announced its intention to acquire Omni Logistics. The deal drew objections from activist investors, who argued that Forward Air was overpaying.

The deal closed in January, but it weighed heavily on Forward’s results, leading to the April ouster of CEO Tom Schmitt. New CEO Shawn Stewart is tasked with rebuilding the company and its reputation with investors. The latest quarter suggests it is having the desired impact.

Forward lost $23.29 per share in the quarter, including one-time restructuring charges. Revenue nearly doubled to $643.7 million from $333.6 million a year ago thanks to the Omni deal. There was no consensus analyst estimate for earnings per share, but the revenue number was about $1 million below expectations.

The underlying trends were positive. Forward increased non-GAAP (generally accepted accounting principles) earnings before interest, taxes, depreciation and amortization (EBITDA) from $55 million in the first quarter to $81 million in the second. The company is also working to present its balance sheet.

“We have recently closed some exciting sales wins and operationally we are focused on capturing previously announced synergies as well as additional cost savings opportunities not previously identified,” Stewart said. “Our accomplishments in such a short period of time have only increased my confidence in our combined ability to build on the strengths of our legacy companies.”

Is Forward Stock a Buy?

Even with Thursday’s jump, Forward shares are still 75% below where they were last summer. Economic uncertainty is weighing on shipping demand, making it difficult for Forward to navigate even without its domestic problems, but the company appears to be headed in the right direction.

If Stewart can reach his Forward potential, the stock still has plenty of freeway to accelerate from here. That’s no easy task, but investors have reason to be intrigued following these strong operating results.