Celadon Group's 1st-quarter profit plunges 96 percent on sharp increase in diesel fuel costs

INDIANAPOLIS (AP) -- Trucking company Celadon Group Inc. said Wednesday its fiscal 2008 third-quarter profit plunged 96 percent on a sharp increase in diesel fuel costs.

The company earned $149,000, or a penny per share for the quarter ended March 31, compared with profit of $3.9 million, or 17 cents per share, during the same period last year.

revenue rose 7 percent to $112.4 million Analysts polled by Thomson Financial, on average, expected profit of 6 cents per share on revenue of $127.8 million.

Operating expenses jumped 21 percent to $136.6 million, with fuel costs rising 50 percent to $41.4 million. The company passed some of the fuel costs on to customers, reporting fuel surcharges spiked 74 percent to $26.5 million.

Celadon said diesel fuel prices were 99 cents per gallon higher, on average, than last year.

"The bigger issue has been the approximately 60 cents per gallon increase in diesel prices during the current March quarter from the first day of January, compared with the last day of March," said Chairman and CEO Steve Russell in a statement. "Due to the lag between the timing of fuel cost increase and the delay in the timing of the recovery from the customer through fuel surcharges, we had a lower than normal recovery percentage of the increased diesel fuel prices. This is typical in rising diesel fuel environments."

A weaker U.S. dollar compared with the Canadian dollar also hurt revenue, Celadon said.

Shares of Celadon Group fell 5 cents to $9.75 in after-hours trading, after rising 10 cents to close at $9.80 during the regular trading session.