May 14, 2009 / 5:16 PM / 9 years ago

UPDATE 1-Finning profit falls on lower sales, restructuring

* Q4 EPS C$0.26 vs C$0.40

* Reuters Estimates C$0.23/shr

* Revenue falls 5 percent

* Shares up 5.6 percent at C$14.25

TORONTO, May 14 (Reuters) - Finning International Inc FTT.TO reported a 35 percent drop in quarterly earnings on Thursday as the weak economy hit equipment sales and rental activity, and restructuring costs ate into its profit.

Finning, which sells and rents heavy industrial equipment and engines, said first-quarter net income was C$45 million ($38.5 million), or 26 Canadian cents a share. That compares with C$70.8 million, or 40 Canadian cents a share, a year earlier.

Finning said results from the latest quarter, ended March 31, included restructuring costs of C$5.8 million. It also said the previous year’s results included gains of C$14.7 million on the sale of some properties.

Analysts had expected a profit of 23 Canadian cents a share, according to Reuters Estimates.

Finning shares were up 75 Canadian cents, or 5.6 percent, at C$14.25 on the Toronto Stock Exchange, shortly after the results were released.

Revenue at the Vancouver, British Columbia-based company was down 5 percent at C$1.36 billion.

The company said the fall in revenue was largely due to lower new equipment sales and rental activity, which was partly offset by higher demand for support services.

Finning said its backlog of equipment orders was worth C$900 million, compared with C$1.7 billion a year earlier, reflecting orders delivered and some cancellations.

The company also announced a quarterly dividend of 11 Canadian cents per common share. ($1=$1.17 Canadian) (Reporting by John McCrank)

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