Higher Rates, Better Freight Drive Celadon Profit

Higher Rates, Better Freight Drive Celadon Profit

Higher truckload rates, lower equipment costs and “better freight” boosted Celadon Group’s profit 63.6 percent in the last quarter as revenue climbed 4 percent.

The parent of Celadon Trucking reported a $9 million net profit on $157.5 million in revenue in the quarter that ended June 30, the company’s fiscal fourth quarter.

For the full fiscal year that ended June 30, Celadon increased net profit 67.8 percent to $25.5 million as the company’s revenue rose 5.4 percent to $599 million.

Freight revenue from its truckload operations increased 4.6 percent in the June 30 quarter to $124.3 million and 1.7 percent for the full year to $475.1 million.

A 4.1 percent rate hike fueled the annualized increase in revenue and profit. Celadon also had lower maintenance and operations costs, the company said Tuesday.

Better customer and freight selection helped push up Celadon’s yield, investment research firm Stifel Nicolaus said in a July 31 note to investors.

A series of acquisitions in the past year brought new drivers to Celadon and raised the carrier’s average seated tractor count in the last quarter by 7.2 percent.

Since last October, Celadon purchased the assets of Glen Moore, American Eagle, Teton Transportation and Hiner Transport, selling equipment and keeping drivers.

The Indianapolis-based carrier’s average number of seated line-haul tractors rose to 2,808 in the June 30 quarter, compared with 2,620 tractors a year ago.

“When we make an acquisition we buy the tractors and then sell them off as quickly as we can,” Chairman and CEO Steve Russell said in an interview earlier this year.

“We then take over the customer base and hire the drivers who meet our qualifications,” Russell said.

The company’s operating ratio for the quarter dipped to 87.2 from 90.9 a year ago. For the full year, Celadon’s OR dropped to 90.2 from 93.4 in its last fiscal year.

Contact William B. Cassidy at wcassidy@joc.com. Follow him on Twitter at @wbcassidy_joc