Finning International Reports Record Revenue and EPS, Exceeding Q2 Expectations

Finning International Inc. (TSX: FTT), the world's largest Caterpillar dealer, delivered a robust financial performance in the second quarter of 2026, surpassing market expectations. The company reported record revenue of C$3.13 billion, marking a 20% increase compared to the same period last year, and exceeding C$3 billion for the first time. This growth was primarily fueled by strong new equipment sales across all regions and consistent product support growth in Canada.

Key financial highlights for the quarter include a record diluted earnings per share (EPS) of C$1.22, a significant 21% increase from the adjusted EPS of C$1.01 reported in Q2 2025. This figure also comfortably beat the consensus analyst estimate of C$1.18. New equipment sales saw a substantial 35% year-over-year increase, largely driven by higher construction and mining equipment deliveries in Chile. Product support revenue also demonstrated strength, rising by 11% and marking the ninth consecutive quarter of year-over-year growth in this segment.

The company's earnings before interest and taxes (EBIT) reached C$249 million, up 16% from the adjusted EBIT of Q2 2025. However, the EBIT margin stood at 8.0%, a 30 basis point decrease from the adjusted EBIT margin in the prior year's second quarter. Regionally, adjusted EBIT margins were 9.7% in South America, 8.3% in Canada, and 6.2% in the UK & Ireland. Finning also generated a positive free cash flow of C$15 million, as increased collections from higher revenues offset investments in working capital to support ongoing growth initiatives.

These strong results are underpinned by healthy customer demand across the global construction, mining, and power & energy sectors. Finning, which provides Caterpillar equipment, parts, services, and performance solutions, operates in Western Canada, Chile, Argentina, Bolivia, the United Kingdom, and Ireland. The company's equipment backlog remained at a record C$3.8 billion as of June 30, 2026, up 22% from December 31, 2025, primarily due to order intake outpacing deliveries across all regions, particularly in the mining and power & energy sectors.

Kevin Parkes, President and CEO of Finning, expressed satisfaction with the results, highlighting that the revenue growth was driven by a combination of robust customer demand, disciplined execution, and strategic investments in growth opportunities. He also noted confidence in the company's strategy, stating that strong customer activity, a record backlog, and expanding product support revenues position Finning well for future success. Analyst sentiment remains largely positive, with nine analysts issuing 'buy' recommendations and no 'hold' or 'sell' ratings.

Looking ahead, a significant portion of Finning's record backlog is anticipated to be delivered within 2026. The company expects continued strong activity in the mining and power and energy sectors, alongside sustained market share gains in construction in Canada. While new construction equipment demand in the UK and Ireland is projected to be softer, contributions from the power and energy sector are expected to grow. In South America, long-term copper demand remains positive, though near-term moderation is anticipated as customers adjust mine plans.