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Finning posts third-quarter profit of $35-million

Finning International is the world's biggest dealer of Caterpillar heavy equipment.

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Heavy-equipment dealer Finning International Inc. has reported earnings of $35-million in its latest quarter, down from $63-million a year ago as the company was hit by costs related to a new parts system.

Vancouver-based Finning said Tuesday the profit amounted to 21 cents per share on $1.33-billion in revenue for the quarter ended Sept. 30.

That compared with a profit of 37 cents per share on $1.21-billion in revenue a year ago.

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The average analyst estimate had been for a profit of 26 cents per share on $1.36-billion in revenue, according to Thomson Reuters.

President and chief executive Mike Waites said the company has made improvements to its new parts system since it was launched in the summer.

"I am confident the system will deliver the expected operational benefits and support our growth objectives," Mr. Waites said.

"As we continue to execute on our long-term strategy, I am optimistic about our growth opportunities going into 2012."

Finning warned last month that costs related to its new parts distribution system and a strike in British Columbia would squeeze tens of millions of dollars from its bottom line.

The industrial equipment company said the higher costs, as well as a five-week strike by 700 employees at its operations in B.C. and the Yukon would reduce third-quarter profits by between 20 and 25 cents a share.

The new system was launched in July, but has had problems that impacted parts supply, warehousing and distribution operations.

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The company said it has worked 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.

Finning 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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