Cat dealer Finning’s order backlog swells to record $2.2B

Canadian Caterpillar dealers Finning International and Toromont Industries reported higher total revenue and strong rental activity in the second quarter, partially offsetting sluggish used equipment sales.  

The dealers’ mixed performances came as Caterpillar’s North American sales and revenue declined 2.1% year over year in Q2, driven by a 14.9% YoY decline in its construction segment. Dealer inventory increased by roughly $100 million, although its total order backlog reached a record $37.5 billion. 

Finning is the world’s largest Caterpillar dealer, and Toromont is among the largest in Canada.  

Finning used equipment sales plummet 

Finning’s total revenue ticked up 0.4% YoY to CA$2.6 billion ($1.9 billion) in Q2, according to its Aug. 6 earnings statement.  

The company’s new equipment sales rose 0.3% YoY to $712.4 million, and used equipment sales plunged 43.2% YoY to $60.2 million driven by a 58% drop in Canada. Equipment rental revenue totaled $53 million, up 4.3% YoY. Gross profit increased 2.1% YoY to $449 million 

Decreased used equipment sales was “primarily due to the large auction sales and one-time deals in Q2 2024 that were not repeated this quarter,” Executive Vice President and Chief Financial Officer David Primrose said during the Vancouver, British Columbia-based company’s earnings call. 

Meanwhile, Finning’s equipment backlog, which measures the retail value of orders placed by customers for future delivery, surged 38% YoY to a record $2.2 billion. The company is seeing strong order intake in all segments, including construction, where orders nearly doubled, Chief Executive Kevin Parkes said during the call. 

“We also saw strong order activity from several mining customers as well as in the power sector related to gas compression,” he said. “Relative to last June, our power equipment backlog is up 88%.” 

Toromont rental revenue spikes 15.3% 

Revenue for Toromont’s Equipment Group segment totaled $870.5 million in Q2, up 0.1% YoY, according to its July 29 earnings statement.  

New equipment sales fell 4.8% YoY to $385.8 million, and used equipment sales dropped 6.2% YoY to $60.3 million. Rental revenue jumped 15.3% YoY to $92.5 million, “reflecting a larger fleet and improved utilization in certain areas,” EVP and CFO John Marshall Doolittle said during the Toronto-based company’s earnings call. 

Revenues for “light equipment rentals were up 13%, heavy equipment rentals up 18%, material handling up 29%, offset by a decrease in power rentals, down 10%,” he said. 

However, the expanded rental fleet impacted used equipment sales amid lower conversions to for-sale units, Doolittle said, referring to this process as “rental fleet dispositions.” The decline in new equipment sales was partly attributed to muted demand for mining equipment, he said. 

Operating income for Toromont’s Equipment Group, meanwhile, fell 6.7% YoY to $111.8 million. Its order backlog decreased 4% YoY to $725.4 million.  

Editor’s note: All amounts have been converted to U.S. dollars. 

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