Arriva says revenue up, but shares fall

LONDON (Reuters) - British bus and train group Arriva (ARI.L: Quote, Profile, Research) said on Wednesday its first quarter revenue rose 60 percent and its outlook was good, but its shares fell due to fears over high fuel prices.

The company, which runs over 13,000 buses and trains across the UK and Europe, said in a statement the rising sales showed strong growth on the continent and that its earnings per share was also substantially higher.

It said its hedging policy protected the group from fuel prices during 2008, but acknowledged they had increased substantially.

Oil is currently near all-time highs at $117 a barrel, and is feeding into fuel costs. The position is exacerbated in the UK by a potential strike at Scotland's Grangemouth oil refinery.

Arriva shares were down over 4 percent at 634.5 pence by 1334 GMT, valuing the company at 1.26 billion pounds ($2.50 billion).

"I think that fuel costs are the main thing of concern, while like the rest of the sector it (Arriva) is probably more vulnerable to a downturn than people expect," said Blue Oar transport analyst Douglas McNeill.

Arriva is likely to continue an acquisition spree across Central Europe. It entered the Hungary and Slovakia markets for the first time last week.

(Reporting by John Bowker; Editing by Andrew Hurst)