From what I've learned, pneumonia in both foals and older horses is often a result of some other illness or infection--any horse that gets run down, whether from illness, stress, exhaustion, worm overload, malnourishment--will be more susceptable to pneumonia. I think the most common way for pneumonia to develop is as a secondary bacterial infection following a viral respiratory infection.
We've had several cases of pneumonia here over the years--twice in mature horses, 2 or 3 times in foals, and all cases have been caused by a secondary bacterial infection following a viral infection (influenza). In the case of one foal it was a strangles infection that went through our herd--with the one young foal and one broodmare, they developed pneumonia.
In our case, with the flu infections, we've had the virus work its way through our herd--in most cases the horses are lethargic, feverish, they might go off feed for a couple days, have some of them that cough, some snotty noses. The thing with the foals, it can turn into pneumonia so easily. When one of the babies gets a snotty nose, we watch it like a hawk. A snotty nose with no other signs, we'll wait & see. If that foal shows any sign of having increased respiration, though, we treat it aggressively as that is the first sign of major trouble.
Foals with pneumonia start out showing heavy breathing. They may not look sick otherwise. There may not be any nasal discharge, there probably won't be any coughing. The foal will still be nursing & may even seem fairly bright--you have to look closely to see that the foal isn't quite itself, perhaps a little duller than he should be. The breathing is the key--if you wait until the foal stops nursing you may have waited too long. Twice I've called the vet from work first thing in the morning to say that we had a foal that was showing some signs of breathing problems--foal was fine the night before, just not quite right in the morning--and both times the vets have told me to leave work & come & pick up the medication & take it home & give it to the foal NOW--I'm not to wait until after work, not wait until lunch hour, not even wait for morning coffee break--they want me to go & get the drugs into that foal immediately, because even a couple hours can make a huge difference.
Now, that is the ordinary sort of pneumonia. There is a different type that is specifically known as foal pneumonia, a disease caused by a Corynebacterium equi infection. This sort is rather uncommon, but apparently occurs more frequently in certain locations or types of soil. It's thought to live in decayed matter in the soil, and may be inhaled or it may enter the body by way of the umbilical stump. According to my vet book it doesn't appear to be transmitted from horse to horse. It usually occurs under the age of 4 months and mortality is high. It usually develops gradually, becoming well established before external signs are apparent. Signs are variable; foals may show little sign of illness until near death, or they may exhibit loss of appetite and condition for several weeks before respiratory symptoms are obvious. Once there are obvious respiratory signs, the disease generally follows a rapid course (1 - 2 weeks) and results in death. Signs may include fever, rapid pulse & respiration, coughing, purulent nasal discharge, watery eyes and diarrhea. The infection causes numerous suppurating abscesses in the lung. The lymph nodes, large intestine, liver, kidnesy, brain and joints may also exhibit lesions though these are found at post mortem only. If diagnosis is early, tetracycline & chloramphenicol are effective, but treatment can be frustrating because the bacteria tends to become resistant to the drugs very quickly. That info is taken from my Equine Research vet book by the way. Thankfully I've had no personal experience with Foal Pneumonia; the ordinary pneumonia is bad enough!