Its stock price of $9.45 per share is half its value early this year. Two analysts have downgraded the stock in the past month, and one of them expects Celadon earnings to be down by a third from this time last year.
Yet, said Todd Fowler, senior transportation analyst at KeyBank Capital Markets in Cleveland, the company will likely survive a cyclical downturn in the industry to snap up business that could materialize if competitors go bankrupt.
"They're caught in some chopping waters right now in the domestic freight market," Fowler said.
Fowler expects Celadon to report 21 cents per share in profit for its first fiscal quarter ended Sept. 30, which is in line with a survey of analysts by Thomson Financial. Still, that would be a 30-percent decline from a year ago.
Fowler early this month downgraded Celadon to "hold" due to overall malaise in the industry. A Stephens Inc. analyst also issued a downgrade, to "equal weight."
Celadon isn't the largest public company in the state-it ranked 33rd last year, with $437 million in annual sales, according to IBJ's Book of Lists. Yet, it has more than 3,000 workers, roughly 600 of whom are based in Indiana, including its headquarters at 9503 E. 33rd St. near interstates 70 and 465 on the far east side.
The company specializes in truckload shipments, those in which all goods in a particular load belong to one shipper.
The industry has been sluggish for more than a year. Fuel prices are high. And a seasonal peak in shipping driven by retailers' stocking up for holiday sales didn't materialize last year, and it isn't happening this fall.
Most of the weakness is caused by the turbulent housing market and iffy consumer confidence, Fowler said.
Celadon might face intense price competition because its sector is dominated by small shippers who are likely to "irrationally" cut prices in a desperate attempt to stay in business.
If Celadon can navigate a period that might Fowler calls a "freight recession," it might be positioned to pick up business left by competitors forced out of the industry by bankruptcy-possibly beginning early next year. Celadon also would be positioned to increase prices again.