By Adriano Marchese
Shares of Finning International were sharply lower Tuesday morning despite beating expectations on a number of metrics in its third quarter, thanks to strong performance in Canada and South America.
At 9:56 a.m. ET, shares were trading 6.8% lower at 34.96 Canadian dollars ($25.52).
The Canadian industrial equipment dealer, which specializes in Caterpillar products, reported late Monday that earnings per share rose 9% to C$1.07.
This was above consensus estimates of a rise to C$1.00 according to a poll of analyst forecasts on FactSet.
Analyst Michael Doumet said in a report for Scotiabank that the better-than-expected result came in despite a tough comparative third quarter of 2022 in which there was a benefit from deferred product support in the prior quarter due to supply chain delays.
Net revenue rose to C$2.44 billion from C$2.11 billion, virtually in line with the analyst forecast of a rise to C$2.45 billion. The company’s new equipment segment saw a rise in revenue of 28% to C$870 million, and product support, its largest segment reached revenue of C$1.36 billion, up 13%.
Meanwhile, revenue from its used equipment segment fell by 25% to C$72 million.
Consolidated backlog slipped by about 5% quarter-over-quarter to C$2.3 billion due to orders in South America. These were offset by strong Canadian deliveries and lower U.K. and Ireland backlog levels, Steve Hansen of Raymond James said in a report.
Hansen noted that despite the pullback, backlog levels are still near record levels.
Write to Adriano Marchese at [email protected]
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