Truckload conglomerate Celadon Group is downgrading financial performance projections for this year in the face of anti-Mexican truck rulings as well as higher diesel fuel prices. Instead of projected 2003 earnings of $1.10 to $1.20 per share, Celadon has revised its earnings estimate down to between 90 cents and $1 a share.
The main reason is the January 13 decision by the Federal Appeals Court in San Francisco that Mexican-owned trucks could not move freight between the United States and Mexico until the U.S. DOT completes an Environmental Impact Study.
That decision put the brakes on Indianapolis-based Celadon's plans to have 300 Mexican drivers operating in the U.S. by December 2003. About 100 of those drivers were to operate EPA-compliant Mexican tractors from Celadon's Mexican affiliate Jaguar, with the balance of those Mexican drivers operating U.S.-based tractors.
Based on the court's ruling, however, Celadon said those 100 Mexican tractors won't be permitted to transport freight to the U.S.
Further, increasing oil prices resulting from the nearly two month-long Venezuelan strike and potential war with Iraq have boosted diesel prices by 10 cents a gallon -- further eroding Celadon's profit projections.