Finning International Q2 Earnings Call Highlights

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Mon, August 10, 2026 at 2:03 AM GMT+3 6 min read

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Finning reported record Q2 results: Revenue rose 20% year over year to C$3.1 billion, adjusted EPS increased 21% to C$1.22, and EBIT climbed 16% to C$249 million, driven by strong equipment deliveries and product-support growth.
Demand remains robust: Equipment backlog reached C$3.8 billion, up 26% from a year earlier, with mining accounting for about half. Product-support revenue grew 11% for the ninth consecutive quarter, led by a 19% increase in Canada.
Power generation is a growing strategic opportunity: Finning highlighted gas compression and potential data-center projects in Western Canada, while Canada's power-and-energy sales rose 63% year to date and related backlog more than doubled.

Finning International (TSE:FTT) reported record second-quarter earnings, with revenue exceeding C$3 billion for the first time and adjusted by strong equipment deliveries, product support growth and a record backlog.

President and CEO Kevin Parkes said the company generated record quarterly earnings per share of C$1.22, up 21% from the adjusted result a year earlier. Revenue rose 20% year over year to C$3.1 billion, while EBIT increased 16% to C$249 million.

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"Strong strategic execution delivered record quarterly EPS," Parkes said, citing growth in the installed base of machines and engines across Finning's territories as a foundation for future product support revenue.

Equipment deliveries and backlog remain strong

New equipment sales increased 34% from the second quarter of 2025, supported by mining deliveries in Canada and South America and construction deliveries across all regions. Used-equipment sales rose 18%, principally due to higher activity in Canadian construction, while rental revenue increased 19% as construction and power-and-energy activity improved.

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Despite the elevated level of equipment deliveries, Finning ended June with C$3.8 billion in equipment backlog. The backlog was unchanged from March, up 26% from a year earlier and 22% from December 2025. Order intake exceeded deliveries during the quarter, according to Chief Financial Officer David Primrose.

Mining represented about half of the backlog, power and energy accounted for roughly one-third, and construction made up the balance. Parkes said the backlog included strategically significant mining orders in Chile and gas-compression orders in Canada.

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Management said quoting activity and fleet-enhancement discussions were increasing in Chile and Argentina. In Canada, Finning pointed to momentum in oil sands production, pipeline activity and infrastructure development, as well as market-share gains across its regions.

Product support growth led by Canada

Product support revenue rose 11% year over year, marking the ninth consecutive quarter of growth. On a trailing 12-month basis, product support revenue reached C$6.2 billion.

Canada led the increase, with product support revenue rising 19% across all sectors, particularly mining. Parkes said growth was supported by a larger mining machine population, rebuild activity and greater penetration of contracted labor. Customer value agreements involving labor increased 70% during the quarter, while Finning increased its technician count in Canada by 20% year over year.

During the question-and-answer session, Parkes said Finning sees an opportunity to double its share of labor supporting Caterpillar equipment in Canada over time. The company has expanded apprenticeship partnerships with multiple colleges to support technician recruitment and training.

Product support margins declined, however, as mining represented a larger share of the business and Finning added technicians who require training and productivity ramp-up time. Parkes also cited growth in less proprietary, more competitive product-support categories and the temporary effect of tariffs on heavy-steel products.

Gross profit margin was 21.3%, down 240 basis points from a year earlier. EBIT margin was 8%, down 30 basis points, as lower product-support margins and a larger proportion of new-equipment revenue affected the sales mix. SG&A expense as a percentage of revenue declined, with the quarterly SG&A margin falling 220 basis points to 13.3%.

Power generation and data centers emerge as strategic focus

Parkes highlighted power generation, including potential data-center development in Western Canada, as a long-term opportunity. He said Finning is working with operators, power producers and government on primary, bridging and backup power solutions.

The company's U.K. and Ireland dealership has supported data-center construction, maintenance and operations for more than a decade. Power-and-energy new-equipment sales in the U.K. and Ireland were up 38% year to date, supported by backlog, management said.

In Canada, power-and-energy sales rose 63% year to date, while backlog more than doubled from the second quarter of 2025. Management attributed the current momentum primarily to gas compression and improved oil-and-gas conditions rather than data-center projects.

Parkes said data-center opportunities in Alberta remain "evolving and dynamic," with timing dependent on approvals and infrastructure development. He said Finning is prepared to package power systems in its territory and believes it can expand that capability with limited investment using existing facilities in Calgary and the Red Deer region.

Management expects backup-power opportunities may emerge first, followed by bridging power during construction of permanent generation. Parkes said prime-power applications offer greater long-term value because they can produce more lifecycle product-support opportunities.

Regional performance and capital position

In South America, functional-currency new-equipment sales increased 35%, driven by construction and mining deliveries in Chile. Product support rose 3%, while EBIT margin was 9.7%. Finning said its outlook in Chile remains supported by copper demand, copper prices, brownfield expansions and interest in greenfield projects. The company also described Argentina's outlook as increasingly positive, particularly for oil and gas and mining opportunities.

Canadian new-equipment sales rose 33%, used-equipment revenue increased 25%, and rental revenue climbed 22%. Canada's EBIT margin was 8.3%, while return on invested capital reached 18%.

Finning generated C$15 million of free cash flow in the quarter. Net debt to adjusted EBITDA stood at 1.6 times at June 30, invested-capital turns were 2.35 times, and adjusted return on invested capital from continuing operations was 19%.

Parkes also announced that Juan Pablo Amar, the leader of Finning's South American business, will retire later this year. Sebastian Reisch will lead the new South American team, with Amar continuing to support the transition.

About Finning International (TSE:FTT)

Finning International Inc is a dealer and distributor of heavy-duty machinery and parts of the Caterpillar brand. The company sells and rents Caterpillar machinery to the mining, construction, petroleum, forestry, and power system application industries. Finning International further provides parts and services for equipment and engines to its customers via its owned distribution network and buys and sells used equipment domestically and internationally after reconditioning or rebuilding the machinery.

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