Skip to main content

The Globe and Mail

Finning shares fall as company warns of lower profits

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

Scott Olson/Getty Images

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.

Story continues below advertisement

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.

Story continues below advertisement

"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 an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

If your comment doesn't appear immediately it has been sent to a member of our moderation team for review

Read our community guidelines here

Discussion loading…

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.