Finning International, the world’s biggest Caterpillar dealer/rental company last week raised its dividend for the second time this year, while posting a 68 percent increase in third-quarter net income on a 14 percent revenue increase. Finning posted CA $1.33 billion (about U.S. $1.37 billion) in revenue for the third quarter, up from $1.17 billion in the third quarter of 2006.
Pre-tax operating profit from continuing operations dropped 4.2 percent to $109.9 million as Finning’s British subsidiary, Hewden Stuart PLC, sold its tool rental division. However, net income leapt to $63.6 million, 35 cents per share, compared with $37.9 million, or 21 cents per share in the year-ago period, which included a $33.9 million after-tax loss from discontinued operations.
Canadian revenue was 8 percent higher year over year. The Vancouver-based company has operations in western Canada, Great Britain, Chile, Argentina, Bolivia and Uruguay.
CEO Doug Whitehead said the company remains on track to report full-year earnings within its range of $1.48 to $1.60 per share, but because of the strong Canadian dollar, earnings would be in the lower end of the range.
“This is a headwind that we have been bucking for three or four years here, but it certainly affected us in the current quarter,” Whitehead said on a conference call. “We are going to be battling the strong Canadian dollar in the fourth quarter.” However, Whitehead said the outlook for the company was strong, with an order book totaling $1.8 billion, and strong demand expected in the construction and mining sectors.
“We don’t see any weakness in the construction-related equipment spending,” Whitehead said. “In the housing sector, unlike parts of the United States, certainly in Western Canada, South America and the U.K., housing business is good to absolutely great.”
Finning is No. 13 on the RER 100.
