Finning International Inc. increased its quarterly dividend on Tuesday as it reported lower first-quarter earnings than a year ago, weighed down by the troubled launch of its new parts management system.
The heavy equipment dealer said it would now pay a quarterly dividend of 14 cents per share up from 13 cents.
The increase came as Finning earned a first-quarter profit that amounted to $67-million, or 39 cents per share, in the quarter ended March 31, compared with profit of $71.5-million, or 42 cents per share, a year ago.
Revenue amounted to $1.47-billion, up from $1.27-billion.
The company’s earnings were hurt by support and improvement costs for its new parts management system that has caused headaches for the company since its introduction last year.
Finning estimated that support and improvement costs for the new enterprise resource planning system cut its earnings by 9 cents per share.
Foreign exchange added 3 cents per share for the quarter.
“Strong prevailing market conditions across our regions are reflected in our excellent start to the year and provide a solid platform for growth throughout 2012,” Finning president and chief executive officer Mike Waites said in a statement.
Finning closed its deal for the distribution and support businesses of former Bucyrus Intl. from Caterpillar last week. The $465-million (U.S.) deal helps bulk up Finning’s position in the mining industry.
The company rents giant dump trucks, backhauls and other equipment to mining companies, oil sands operators, construction companies and others around the world and also services the equipment.
It also runs a Caterpillar engine and equipment component remanufacturing plant in Edmonton, a mining and heavy equipment preparation and overhaul operation in Red Deer, Alta., and compression equipment repair shops in Western Canada.
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