November 9, 2010 / 1:07 PM / 8 years ago

UPDATE 2-Rocky Mountain Q3 profit trails, CEO to become chairman

* Q3 EPS C$0.20 vs est C$0.31

* Q3 rev up 17 pct to C$170.5 mln

* Expense rises 36 pct

* Shares fall 4 pct (Adds margin, inventory details; updates shares)

Nov 9 (Reuters) - Agriculture and construction equipment broker Rocky Mountain Dealerships Inc (RME.TO) posted a lower-than-expected quarterly profit, hurt by higher expenses, sending its shares down 4 percent.

The Calgary-based company also said Chief Executive Matt Campbell will be replaced by Chief Operating Officer Brian Taschuk, effective Jan. 1. Campbell will be the company’s executive chairman.

For the July-September quarter, the company posted net profit of C$3.8 million, or 20 Canadian cents a share, compared with C$4.9 million, or 34 Canadian cents a share, a year ago.

Rocky Mountain, which sells, rents, and leases new and used construction and agriculture equipment, said revenue for the quarter rose 17 percent to C$170.5 million.

Analysts on average were expecting the company to earn 31 Canadian cents a share, on revenue of C$163.9 million, according to Thomson Reuters I/B/E/S.

Selling, general, and administrative expenses rose 36 percent to C$17 million, spurred by addition of nine new location since the third quarter of 2009.

Gross profit margin was flat at 15 percent. Inventory as of Sept. 30 was $273.8 million, up from $247.6 million at the end of fiscal 2009.

Rocky Mountain’s shares were down 3.6 percent at C$9.45 in afternoon trade on the Toronto Stock Exchange. They have gained about 20 percent in value since reporting second-quarter results in August. (Reporting by Arnika Thakur in Bangalore; Editing by Don Sebastian)

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