February 9, 2009 / 5:02 PM / 9 years ago

UPDATE 2-Toromont earnings jump 25 percent, but orders drop

* Fourth-quarter EPS C$0.76 vs C$0.61

* Revenues up 14 percent at C$609.7 million

* Reuters Estimates EPS view C$0.63, rev view C$606.40 mln (Adds details, share price)

TORONTO, Feb 9 (Reuters) - Industrial equipment supplier Toromont Industries (TIH.TO) said on Monday its quarterly profit rose by 25 percent, driven mainly by strong U.S. growth in its natural gas compression business, but it warned of dwindling bookings related to the dropoff in the economy.

The Concord, Ontario-based company said its fourth-quarter profit was C$49.1 million ($40.2 million), or 76 Canadian cents a diluted share, for the three months ended Dec. 31, up from C$39.3 million, or 61 Canadian cents, a year earlier.

Analysts, on average, had expected earnings of 63 Canadian cents a share, before items, on revenue of C$606.40 million, according to Reuters Estimates.

Toromont, which supplies Caterpillar (CAT.N) heavy construction and industrial equipment, as well as compression systems, said revenue was up 14 percent at C$609.7 million.

While the company said it was pleased with its quarterly results, it warned that orders had dropped off “significantly” as the economic downturn worsened.

Equipment group bookings were down 36 percent for the period and compression group bookings were down 30 percent.

Toromont said it began 2009 with large backlogs in its compression group, which should provide good momentum through the first half of the year.

Equipment group backlogs were also solid and the company said stimulus plans announced in the recent Canadian federal budget could be positive for its operations.

Revenue from the equipment group slipped 4 percent in the quarter on lower new machine sales. That was partly offset by increases in used equipment sales, rental and product support. The compression group saw a 39 percent rise in revenue.

Operating income rose 21 percent to C$74.5 million.

Toromont ended the year with cash flow of C$137.3 million and a total debt net of cash as a percentage of shareholders’ equity of 5 percent versus 19 percent the previous year.

Shares of Toromont were down 32 Canadian cents, or 1.4 percent, at C$22.03 on the Toronto Stock Exchange around noon.

$1=$1.22 Canadian Reporting by John McCrank; editing by Rob Wilson

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