Caterpillar dealer Finning to cut more jobs, shut outlets

Canada’s Finning International, the world’s biggest dealer of Caterpillar equipment, said on Thursday it would cut another 1,100 jobs in Canada and South America and close 11 Canadian locations due to weak sales.

The latest job cuts bring the total to 1,900 this year, or 13 % of the company’s global workforce.
Vancouver-based Finning also reported lower-than-expected quarterly revenue and profit as its customers in the mining, energy and construction industries cut spending.

Finning shares fell more than 13 percent to C$17.33 in early trading on the Toronto Stock Exchange.
Caterpillar, the world’s largest maker of construction and mining equipment, has been hit by weak mining, drilling and construction activity around the world, and has forecast a drop in 2016 sales and profit.

Finning said it would shut 11 sites in Western Canada to reduce costs. The company had already announced the closure of 16 locations in the country.

The company said it would cut 450 jobs in Canada, bringing the total job cuts to 1,100 in the country this year.

About 550 jobs will be cut in South America, bringing the total cuts in the region to 1,200 since mid-2013. The latest cuts also include 100 jobs in the UK and Ireland.

Finning, which said the strong U.S. dollar was also affecting its business, reported a 10 percent drop in third-quarter revenue as new equipment sales fell 30 percent. Net income fell 42 percent to C$33 million ($25 million), or 19 Canadian cents per basic share.

Excluding one-time items, Finning earned 34 Canadian cents per share, below the average analyst estimate of 41 Canadian cents, according to Thomson Reuters I/B/E/S. The company’s quarterly revenue of C$1.5 billion fell short of the average analyst estimate of C$1.65 billion.

Up to Wednesday’s close of C$19.99, Finning’s stock had fallen 21 percent since the start of the year.

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