Second quarter revenue for the largest Caterpillar distributor Finning International jumped 21 percent to $1.58 billion, compared to the same period last year, driven by a 46-percent increase in new equipment sales on a consolidated basis.
The company also cites product support revenue growth of 13 percent, indicating all operations reported higher parts demand.
“Our second quarter results demonstrate strong operating leverage as we continue to benefit from operating performance improvements and a reduced cost base,” says President and CEO Scott Thomson. “Strengthening demand for equipment and product support in all our regions had a positive impact on our results, and we now expect our annual revenues to increase modestly over 5% compared to 2016.”
Net income for the quarter reached $56 million, compared to $5 million the same period in 2016. Earned income before interest, taxes, depreciation and amortization grew 87 percent to $146 million.
Revenues in Canada grew by 25 percent, “with higher revenues in all lines of business except used equipment. New equipment sales were up 50%, driven by engine sales to gas compression customers, and higher deliveries of mining equipment.” Earnings before interest and taxes (EBIT) grew 42 percent compared to the same period in 2016.
Revenues in South America grew by 20 percent, with EBIT up 10 percent to $43 million.
In the United Kingdom and Ireland, revenues were up 12 percent, with EBIT of $11 million.
Finning’s new equipment revenues for the quarter grew by 46 percent to $550 million, while used equipment revenues dropped 6 percent to $96 million. Rental revenues increase slightly to $54 million, and product support revenue grew 13 percent to $877 million.