Finning International reported strong third-quarter 2010 results driven by robust top-line growth and improved EBIT margins. Third-quarter revenue was CA$1.22 billion (about U.S. $1.21 billion) a 21-percent year-over-year increase compared with CA $1.01 billion in the third quarter of 2009. EBIT grew 87 percent compared with Q309 to $88 million compared with $47 billion a year ago, and basic earnings per share grew by 140 percent to 36 cents compared to 15 cents in the same quarter a year ago.
Net income also grew 140 percent from CA$26 billion in the year-ago quarter to CA$61 billion this year.
Rental revenues increased across all regions and were up 9 percent compared with Q309. The company posted $81.4 million worldwide in equipment rental, compared with $74.5 million in the third quarter last year.
“Our equipment backlog climbed by 21 percent to $1.2 billion and product support business increased by 17 percent as all our operations captured strong growth opportunities in their respective markets,” said Mike Waits, Finning International president and CEO. “Continued margin recovery in Canada underpins the decision we have made to proceed with the construction of a new oil sands service facility in Fort McKay, Alberta.
“The outlook for the second half of 2010 is shaping up to be better than we had originally expected with the third quarter being an exceptionally strong quarter,” said Dave Smith, executive vice president and chief financial officer. “Led by higher-than-anticipated product support and new equipment revenues, we now expect revenues from continuing operations for the full year to be about equal to 2009 despite a $900 million lower backlog going into 2010. As markets recover and our cost structure is reduced, we are producing higher operating leverage which is expected to result in moderately better EBIT performance compared to 2009.”
In Canada, third-quarter revenues rose 23 percent compared with Q309, driven by higher new equipment sales and strong growth in product support revenues. Rental revenues increased 3 percent.
Based in Vancouver, B.C., Canada, Finning operates Caterpillar dealerships in western Canada, Argentina, Uruguay, Bolivia and Chile, Ireland and the United Kingdom. It is No. 10 on the RER 100.