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Finning Posts Strong Q3 Profit Numbers

Finning International, the world’s largest Caterpillar dealer, last week reported third-quarter revenue from continuing operations of CD $1.22 billion (U.S. $1.06 billion), a 4.8 percent increase from the third quarter of 2005. However, net income from continuing operations was CD $72.8 million ($63 million U.S.), or 81 cents per share, a 55-percent jump in diluted earnings per share compared with the same period last year.

Revenue for the first nine months of 2006 went from CD $3.42 billion (U.S. $3 billion) to $3.63 billion (U.S. $3.18 billion), a 6.1-percent jump, while total net income leapt 18.5 percent year over year, from CD $127.8 million (U.S. $111.9 million) in last year’s first nine months to CD $151.4 million (U.S. $132.6 million).

“Results from our Canadian and South American operations continue to be very strong,” said Mike Waites, executive vice president and chief financial officer. “We are pleased with the much-improved financial results in 2006 at our U.K. dealership. What is especially gratifying is that in each of our three regions, profitability, as illustrated by EBIT margin, has improved substantially over the past year, reflecting a shift in business mix to higher margin parts and service, a focus on lowering operating costs, improved efficiencies and better price realization.”

Revenue was higher in the third quarter in Finning’s Canadian operations as a result of robust activity driven by high commodity prices and an increase in infrastructure spending. Revenues from South American operations increased modestly with a strong revenue mix shift to customer support services. Those increases were offset by lower rental revenue in Finning’s Hewden operations in the United Kingdom, primarily as a result of aggressive competition in the U.K. marketplace.

Equipment rental in Canada rose 18.2 percent year over year to CD$64.8 million (U.S. $56.7 million). For the nine-month period, Canadian rental revenue was CD $174.5 million (U.S. $152.8 million), up 17.3 percent year over year.

Finning is based in Vancouver, B.C., with its Cat Rental Store operations based in Edmonton, Alberta. In Canada it covers British Columbia, Alberta, the Yukon Territory, the Northwest Territories and a portion of Nunavut. In South America it covers Chile, Argentina, Uruguay and Bolivia. Its equipment rental operations in the U.K. include England, Scotland, Wales and Jersey.

Finning is No. 16 on the RER 100.

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