Finning International (FTT) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 2025 was $2.5 billion, up 11% year-over-year, with strong product support and new equipment sales, and 50% of revenue from international operations.

• Adjusted EPS increased 18% to $0.99, excluding a $0.22 per share impairment loss from ComTech; reported EPS was $0.77.

• Equipment backlog reached a record $2.8 billion, up 45% year-over-year and 9% sequentially, driven by mining and power systems orders.

• Free cash flow was $135 million in Q1, a significant improvement from a $210 million outflow in Q1 2024.

• Sale of 4Refuel for up to $450 million will simplify operations, is expected to be accretive to EPS, and proceeds will fund share repurchases, debt repayment, and core reinvestment.

Financial highlights

• LTM Q1 2025 net revenue reached $10.3 billion, up 5% year-over-year.

• Adjusted EBIT increased 6% year-over-year to $213 million, excluding a $45 million impairment loss.

• Gross profit margin was 24.9%, down 70 bps year-over-year, mainly due to lower product support margins.

• SG&A as a percentage of net revenue decreased by 50 basis points to 16.4%.

• Free cash flow for Q1 2025 was $135 million; LTM free cash flow totaled $1.2 billion.

Outlook and guidance

• Strong outlook for Chile mining, driven by copper demand and capital deployment in brownfield expansions.

• Canada expects increased infrastructure spending and energy sector growth post-election, with backlog burn extending into mid-2026.

• UK & Ireland anticipate soft construction demand but growing contributions from used equipment and power systems, with backlog up 80% year-over-year.

• Resiliency initiatives and cost management to mitigate market uncertainty and strengthen earnings capacity.

• Anticipate higher labor costs in South America, with proactive negotiations underway.