August 11, 2009 / 5:40 PM / 8 years ago

UPDATE 2-Rocky Mountain Dealerships shares rise on earnings

* Shares up 12 percent on the TSX

* Q2 EPS C$0.28 vs C$0.21 year earlier

* Analysts had been expecting C$0.22 a share

* Revenue up 64 pct (Adds share price movement, analyst’s comments)

TORONTO, Aug 11 (Reuters) - Shares of Rocky Mountain Dealerships Inc RME.TO jumped 12 percent on Tuesday after the agriculture and construction equipment broker reported a higher than expected quarterly profit, helped by brisk sales.

The company earned C$3.8 million ($3.49 million), or 28 Canadian cents a share, for the period ended June 30, 2009. That compares with net income of C$2.7 million, or 21 Canadian cents a share, in the same period last year.

Rocky Mountain Dealerships, which sells, rents and leases new and used agriculture and construction equipment, said net sales for the quarter were up about 64 percent at C$155.1 million.

Analysts, on average, had expected the company to earn 22 Canadian cents a share, before items, on revenue of C$119.6 million, according to Reuters Estimates.

Shares of the company were up 55 Canadian cents at C$5.05 on Tuesday afternoon on the Toronto Stock Exchange.

“New/used equipment sales and product support all performed well, benefiting from acquisitions made in late 2008 and 2009, and strong agricultural equipment sales,” Bert Powell, an analyst at BMO Capital Markets, said in a note to clients.

He added, however, that while Rocky Mountain Dealerships expects agricultural equipment sales to remain strong through 2009, competition in the construction equipment market, due to the slowdown in residential and commercial building, would weigh on both sales and margins.

The company said it does not expect significant improvement in the construction equipment business until 2010.

Rocky Mountain Dealerships, which has 22 dealership branches in Alberta, Saskatchewan and Manitoba, kept its quarterly cash dividend at C$0.045 a share. ($1=$1.10 Canadian) (Reporting by Chakradhar Adusumilli in Bangalore and John McCrank in Toronto; editing by Peter Galloway)

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