March 9, 2010 / 1:03 PM / in 8 years

UPDATE 2-Rocky Mountain Q4 lags market; shares down

* Q4 earnings per basic share C$0.35 vs est C$0.37

* Product support sales down 4 pct

* Sees construction business rebound in H1

* Shares down 9 percent (Recasts; adds conference call details, analyst comments, share movement)

By Gowri Jayakumar

BANGALORE, March 9 (Reuters) - Rocky Mountain Dealerships Inc (RME.TO) posted a lower-than-expected quarterly profit, hurt by poor performance at its construction segment, sending the agriculture and construction equipment broker’s shares down as much as 9 percent.

Revenue from construction equipment segment fell 49 percent in the fourth quarter.

On a conference call with analysts, Chief Operating Officer Brian Taschuk said he sees the construction business rebounding over the first half of 2010.

M Partners analyst Tom Varesh expects the business to pick up from the second quarter.

“We are in Canada. You have to take into consideration the fact that we are in winter now and first quarter is going to certainly capture January and February, which are very cold months,” the analyst told Reuters.

“Infrastructure projects are hitting the ground, you’ll see those peak in the summer time,” Varesh added.

The company expects to add about C$56 million in incremental revenue in 2010 from the acquisitions it made in 2009, including that of Enns, an agriculture dealership in Winkler, Manitoba.

The company, which historically makes acquisitions to grow, also bought Roydale New Holland Inc, an agriculture dealership in Red Deer, Alberta, earlier this month.

“I think with the recent acquisition of the Holland business, it’s opened up tremendous opportunities for rapid expansion,” Varesh said, adding that he expects the company to make further acquisitions in 2010 and 2011.

For the fourth quarter, net profit was C$5.7 million, or 35 Canadian cents per basic share, compared with a loss of C$93.5 million, or C$7.34 a share, a year ago.

Net sales rose marginally to C$147.7 million, from C$146.9 million last year. Revenue from its product support segment fell about 4 percent to C$21.2 million.

Analysts on average were expecting the company to earn 37 Canadian cents, on revenue of C$183.2 million, according to Thomson Reuters I/B/E/S.

Shares of the Calgary, Alberta-based company were down 5 percent at C$10.29 in late-afternoon trade Tuesday on the Toronto Stock Exchange. They touched a low of C$9.83 earlier in the day. (Reporting by Gowri Jayakumar in Bangalore; Editing by Bijoy Koyitty and Maju Samuel)

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