NEW YORK (AP) -- Shares of Forward Air Corp. dropped on Tuesday after the contractor for the air cargo industry cut its profit guidance, saying that volumes have dropped and a price increase hasn't boosted revenue as much as hoped.
THE SPARK: Late Monday, Forward Air said it now expects to earn 39 cents to 41 cents per share for its third quarter, which ends Sept. 30. It had previously expected 47 cents to 51 cents per share. That's below the view of analysts polled by FactSet, who had expected profit of 50 cents per share.
The quarter got off to a "surprisingly strong start" but airport-to-airport tonnage began to fall in August, said CEO Bruce Campbell, and last week they fell to levels that were less than the same period last year.
He also said that a rate increase in September didn't lift yield, or the amount of revenue collected per ton and per mile, by as much as the company had expected it would.
THE ANALYSIS: Stifel Nicolaus analyst David Ross said that the economic softness hurting Forward Air is consistent with expectations for other shippers, carriers, and freight forwarders that his team has spoken with in the past several weeks. He maintained a "Hold" rating on the shares.
SHARE ACTION: Down $3.09, or 8.9 percent, to $31.72 in afternoon trading. Shares had gained almost 9 percent in 2012.