Shares of heavy equipment dealer Finning International Inc. fell about 3 per cent in trading Friday after the company warned that the costs of its new parts-distribution system and a B.C. strike will squeeze tens of millions of dollars from its profits.
The Vancouver company's stock closed at $20.04, down 62 cents, on the Toronto Stock Exchange on Friday.
Finning is the world's largest dealer of Caterpillar heavy equipment. It has operations in Canada, the United Kingdom, South America and elsewhere and is a major supplier to the oil sands and mining industries.
The company employed about 11,900 people at the end of 2010.
Finning said it faces higher costs in implementing its new parts-supply system, which began operations this summer but faced startup problems,
The industrial equipment company said those higher costs, as well as the impact of a five-week strike at its B.C. operations will reduce third-quarter profits by between 20 cents and 25 cents a share.
With 171.5 million shares outstanding, the profit drop at Finning could approach $43-million at the high end.
“We are extremely grateful to our customers for their patience and apologize for the inconvenience this has caused,” said Mike Waites, president and CEO of Finning. “We, at Finning, are committed to maintain our customers' loyalty.”
The new enterprise resource planning, or ERP system, was launched July 4 but had initial problems that affected parts supply, warehousing and distribution operations.
The company has tried to improve the system's efficiency and the ability to process parts orders has improved to the point where the company expects fourth-quarter parts operations should approach normal levels.
“The ERP platform will drive operational excellence and support our long-term growth objectives,” Mr. Waites added.
“Specifically, the new system significantly improves our capacity for planning, service scheduling, and forecasting capabilities, as well as many other facets of the business and will support our strong growth plans into 2012 and beyond.”Report Typo/Error