Mike Waites CEO of Finning at his office in Vancouver Sept. 22, 2010.JOHN LEHMANN/The Globe and Mail
Finning International Inc. reported Wednesday a second-quarter profit of $81.3-million and raised its revenue guidance for the year, boosted by stronger than expected revenue growth this year and a solid order backlog.
The heavy equipment dealer raised its expectations for revenue growth to between 12 and 15 per cent compared with an earlier forecast for growth of eight to 10 per cent.
Finning said the profit for the quarter ended June 30 amounted to 47 cents per share, down slightly from $81.9-million or 48 cents per share a year ago.
The average analyst estimate compiled by Thomson Reuters had been for a profit of 46 cents per share.
Revenue grew to $1.76-billion, up from $1.48-billion, driven by higher revenues in all areas of Finning's business.
New equipment sales were up 27 per cent, driven by Canada, while product support revenue grew by 13 per cent.
Used equipment sales and rental revenues increased by nine per cent and 12 per cent respectively.
Finning's order backlog increased to $1.7-billion at June 30, up from $1.6-billion at the end of March.
"I am pleased with our strong quarterly revenues fuelled by a third consecutive quarter of record product support as well as solid new equipment sales," Finning president and chief executive Mike Waites said in a statement.
"In light of uncertain global economic conditions, we are monitoring our end markets closely and are simply taking prudent steps to manage our inventory levels, in order to maintain a strong financial position."
During the quarter, the company recorded roughly seven cents per share in costs related to its troubled new parts supply system that it introduced last year.
Finning said Wednesday that it continued to make good progress in improving the system and expects that the remaining costs will not be material to its results in the second half of 2012.
Vancouver-based Finning rents and services giant dump trucks, backhauls and other equipment to mining companies, oilsands operators, construction companies and others around the world.
The company Finning 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.
Shares in the company were up 89 cents at $24.73 in trading on the Toronto Stock Exchange on Wednesday.