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• Net Revenue: $2.5 billion, up 4% from Q3 2023.

• Adjusted EBIT: Down 19%, primarily due to lower margins in Canada.

• Adjusted EPS: Down 13%.

• Free Cash Flow: $346 million in Q3; $746 million over the last 12 months.

• New Equipment Revenue: Up 7%, driven by strong mining deliveries in Canada and South America.

• Used Equipment Revenue: Up 24% year-over-year.

• Product Support Revenue: Up 2% year-over-year.

• Rental Revenue: Decreased by 12% due to lower utilization factors.

• Equipment Backlog: $2.3 billion at the end of September, up 4% from the end of June.

• SG&A as a Percentage of Net Revenue: 16.8%; excluding estimated loss on receivables, 16.2%.

• South America New Equipment Sales: Up 14% from Q3 2023.

• South America Used Equipment Sales: Up 68% year-over-year.

• South America Product Support Revenue: Up 7% year-over-year.

• Canada New Equipment Sales: Up 4% from Q3 2023.

• Canada Product Support Revenue: Down 3% from Q3 2023.

• UK and Ireland New Equipment Sales: Down 3% compared to Q3 2023.

• UK and Ireland Used Equipment Sales: Up 49% year-over-year.

• UK and Ireland Product Support Revenue: Down 2% from record levels in Q3 2023.

• Warning! GuruFocus has detected 4 Warning Signs with SNDA.

Release Date: November 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Finning International Inc (FINGF) reported strong free cash flow of $346 million in Q3, contributing to $746 million over the last 12 months, exceeding net income.

• The South American segment showed robust performance with new equipment sales up 14% and used equipment sales up 68% year-over-year.

• The UK and Ireland operations expanded their margin to 6.3% on an adjusted EBIT basis, driven by SG&A reductions.

• The company secured a significant $250 million equipment order from a global mining customer in Chile, indicating strong demand in the region.

• Finning International Inc (FINGF) continues to see strong demand for power systems, with backlog up 44% since last quarter, driven by data center market wins in the UK and Ireland.

Negative Points

• The Canadian business faced challenging market conditions, with adjusted EBIT down 31% from Q3 2023 due to lower gross margins and product support revenue.

• The company incurred $19 million in severance costs related to headcount reductions and consolidation efforts.

• A $14 million estimated loss was recorded for receivables from a mining customer in Canada placed into receivership.

• Rental revenue decreased by 12% due to lower utilization factors across all regions.

• Finning International Inc (FINGF) withdrew its product support growth targets due to slower-than-expected growth rates in Canada and the UK.