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Finning International Inc.

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2008

Tuesday 12 August 2008 Finning International (FTT : TSX : $25.86)
Solid LT Prospects but limited ST Stock upside
RBC Capital Markets maintains "sector perform", 12-month target price is $29.00

Monday 11 August 2008 (FTT) - $26.00 - Initiating Coverage
Sector Perform, Average Risk - Price Target: $29.00
RBC CM initiated coverage of FTT with a Sector Perform rating and a price target of $29.00.
Strong growth in new equipment sales are expected to continue into 2008 with a heavy backlog dedicated to the 797 trucks for oil sands mining operations, while South American mining should continue to drive solid demand for large CAT equipment in 2009. Canadian new equipment sales are expected to continue growing at 20% in 2008 but at lower margins, while the real value-add maintenance and repair work should follow around 2010 and beyond, driving longer-term margin expansion. The rapid growth in Canada's new equipment sales has bottlenecked facilities given man hours required to prepare new equipment for deliveries, forcing refusal of more lucrative and customer focused repair and maintenance work. The recent Collicutt acquisition should allow the prep assembly of much new equipment in its Red Deere facility, freeing up its current service bays and man hours for critical servicing work. These efforts are expected to pay off in more maintenance contract work over the longer term (2-3 years out). FTT is benefiting from its mining-focused customers given the high prices of commodities, mainly copper, gold, and coal. RBC CM expects continued strength in these markets at both FINSA and in the UK to offset the construction weakness in FTT's Hewden rental business. However, FTT's earnings, margins, and EPS could come in at the low end of guidance this year. If this is indeed the case, share price appreciation would likely be limited. The company reports its Q2 results on Tuesday, August 12th.

Tuesday 15 July 2008 Finning International (FTT : TSX : $23.68)
Cost of acquiring Collicutt was high; will support long-term growth
TD Newcrest maintains "buy", 12-month target price is $34.00

Wednesday 09 July 2008 (FTT : TSX : $25.72)
Files for 10% buy-back in addition to 7.3mm shares already purchased
Blackmont Capital maintains "buy", 12-month target price is $37.00

Monday 09 June 2008 (FTT : TSX : $27.77) Changes at the top
Raymond James maintains "market perform", 6-12 month target price is $31.25

Tuesday 06 May 2008 (FTT : TSX : $30.95) Q1/08 to release tomorrow
Blackmont Capital Inc. maintains "buy", 12-month target price is $37.00

Thursday 21 February 2008 (FTT : TSX : $28.85)Q4 above estimates
Credit Suisse maintains "neutral", 12-month target price is raised to $27.00
Desjardins Securities maintains "top pick", 12-month target price is $34.00
RBC Capital Markets maintains "outperform", 12-month target price is raised to $36.00
Scotia Capital Markets maintains "sector outperform", 12-month target price is $35.00
TD Newcrest maintains "buy", 12-month target price is $34.00
(FTT : TSX : $28.85), Net Change: -0.90, % Change: -3.03%, Volume: 462,832
Soon they’ll be examining how management carries their briefcase into meetings to understand the real meaning of their outlook. Finning reported Q4 EPS of $0.39, well above consensus of $0.36. While revenues and gross margins appeared largely inline with forecasts, the company had lower than expected SG&A costs, which appeared to be the primary driver for the strong results. At least one analyst noted that the outlook section on Finning’s press release was positive but more cautious than in previous reports. Some highlights of the outlook section include: a) "The company's outlook remains positive for the medium (removed “and longer”) term" b) "Weak housing markets and soft economic conditions in the U.S. are not having a noticeable impact on business conditions for the company in western Canada at this time. However the economic challenges in the U.S. are a source of some uncertainty for future economic activity in western Canada." and c) "The outlook for Finning's business in western Canada continues, on balance, to be sound (changed from "strong overall"). While this does not appear to be a dramatic reversal of outlook, it does seem to reflect a more cautious tone. To highlight this, we can see from Finning's backlog, which seemed robust at $1.7 billion, up from $1.5 billion last year, but below the $1.9 billion reached in Q107.

Tuesday 29 January 2008 (FTT : TSX : $26.47)
Caterpillar reported 10% sales growth
Blackmont Capital maintains "buy", 12-month target price is $37.00

Friday 18 January 2008 (FTT : TSX : $25.65)
Closes acquisition of Collicutt Energy Services
Blackmont Capital maintains "buy", 12-month target price is $37.00

Thursday 03 January 2008 (FTT : TSX : $29.05)
2008 likely to be a strong year
Desjardins Securities maintains "top pick",
12-month target price is $33.50

Thursday 13 December 2007 (FTT : TSX : $29.25) EPS guidance in line
Blackmont Capital maintains "buy", 12-month target price is raised to $37.00
RBC Capital Markets maintains "outperform", 12-month target price is $35.00
Scotia Capital Markets upgrades to "sector outperform", 12-month target price is raised to $35.00

Wednesday 12 December 2007 Finning's Caterpillar backlog exceeds $1-billion
Company expects mining equipment deliveries to leap to 432 in 2008 from 369 in 2007

Wednesday 28 November 2007
(FTT-T) C$26.91 Bill MacKenzie, CA, CFA, 416 308 3405
BUY (Unchanged);Target: C$33.00 (Unchanged)
FTT Acquires COH - The Price of Growth in Western Canada

Finning International (FTT) - $26.91 -
Collicutt Energy Acquisition Supports Growing Parts & Service Opportunity
Outperform, Average Risk, Price $35.00
Finning announced that it has entered into a definitive transaction to acquire Collicutt Energy Services for $145 million, including $43 million in assumed debt. For each Collicutt share held, Collicutt shareholders may elect to receive either: (i) $9.75 in cash, or (ii) 0.325 of a Finning common share, or (iii) a combination of cash and Finning common shares. The transaction adds a total of 315,000 sq. ft. across 14 facilities in Alberta and B.C. including a 200,000+ sq. ft near purpose built operational facility in Red Deer which will transition into a centralized new equipment preparation and heavy equipment overhaul facility. The transaction provides potential access to a skilled labor pool of 450 employees including over 240 trained technicians. In addition, management expects the new facilities will improve logistics and labor efficiency, speeding up delivery of new equipment to customers while freeing up capacity in existing branches for additional customer service work. The transaction highlights Finning management's confidence in the continued large stream of new equipment orders and growth in the customer service and support opportunity. Despite what appears to be an expensive valuation, the transaction is expected to be modestly accretive to 2008 earnings while having limited impact on net debt/capitalization.

Finning International Inc.

Wednesday 14 November 2007 Finning International (FTT : TSX : $28.25)
Remains attractive at current level
RBC Capital Markets maintains a "outperform", target price is $34.00

Monday 22 October 2007 Finning International (FTT) - 32.07 - CAT Q3/07
Results Underscore Continued Strength in Finning’s Key Markets
Outperform, Average Risk, Price Target: $34.00
Caterpillar reported Q3/07 EPS of $1.40, up from $1.14 in the prior quarter, but short of consensus of $1.43. Caterpillar also cut its 2007 earnings outlook and issued cautious guidance for 2008 amidst concerns of slow economic growth and possibly a U.S. recession. However, Machinery and Engines sales outside North America in full year 2007 are expected to be up 25% from 2006, and Latin American and EAME machinery sales were up 23% and 43% year over year in Q3/07, respectively.
Caterpillar's results can be viewed as a positive for Finning since they emphasize continued strength in equipment demand in Finning's key geographic regions and industry specialties.

Wednesday 08 August 2007 rbc Finning (FTT) – $27.75 – Q2 Results In Line With Estimates
Outperform, Average Risk, New Target Price: $34.00
FTT reported EPS of $0.39, in line with consensus of $0.37 and RBC CM’s $0.40 estimate. Finning Canada and FINSA posted a strong quarter, with growth of 24% and 49% respectively, and FTT raised its full year guidance from the low end of $1.48- $1.60 per share to the top half. Management expects free cash flow in 2007 to be neutral to modestly negative due to the continued commitment for capital required to support business growth, and highlighted that proceeds from the tool hire sale will likely be used for a combination of share repurchase and debt reduction. RBC CM maintained its Outperform, Average Risk rating and $34.00 price target.

Friday 15 June 2007 Finning (FTT) - Raising Target to $34.00 Following UK Tool Hire Sale Announcement
Outperform, Average Risk, Price Target: $34.00 Finning announced yesterday that it has agreed to sell its tool hire division within UK-based Hewden Stuart. The transaction is consistent with the strategy for Hewden to focus on the plant hire business most closely associated with the Caterpillar equipment line and core Finning strengths. The announced gross sale price of approximately $245 million was above RBC CM’s expectation of $200 million. Under a smaller and more focused Hewden, RBC CM expects the performance of the UK operations to improve at a faster rate through 2008. RBC CM raised its 2008 EPS estimate from $1.88 to $1.96 and increased its target price from $32.00 to $34.00

Thursday 15 February 2007 Finning (FTT) - $50.41 – Solid Results, Price Target Increase
Outperform, Average Risk – Price Target: $55.00 Finning reported stronger than expected results, with EPS of $0.60 versus consensus of $0.52. Revenue growth of 26% year-over-year was well ahead of expectations. Strong results in Canada and South America overshadowed the modest growth in the UK. Finning UK EBIT margins improved from 2.4% in Q4/05 to 4.6% in Q4/06, responding to recent cost reduction initiatives. Management focus remains intense at Hewden, where EBIT margins declined from 5.6% in Q4/05 to 4.8% in Q4/06 as a result of continued low utilization and price realizations in the competitive UK rental market. Indications of performance improvement by mid-year and a potential divesture of Hewden’s tool hire business represent a further catalyst for Finning shares. RBC CM increased its EPS estimates to reflect better than expected revenue growth and larger order backlog. The price target was raised from $53.00 to $55.00.

Thursday 11 January 2007 Finning International Inc. (FTT) - $46.20 – Target Price Increased on Canadian Dollar Weakness
Outperform, Average Risk – Price Target: $53.00
Reflecting a revision to the RBC CM CDN/$US exchange rate assumption from $1.136 to $1.149 the 2008E EPS estimate has increased from $3.16 to $3.30. As a result the target price has been increased from $51 to $53. Further weakening of the Canadian dollar suggests more upside potential to the RBC CM forecast given that every 1% decline in the dollar positively impacts net income by over $0.03 per share. The company continues to exhibit strong revenue visibility with the order backlog estimated to be at $1.4 billion by year-end 2006. Additionally, RBC CM highlights that historically the Finning share price has been closely correlated with commodity prices and a short-term commodity correction may create an attractive buying opportunity.

rbc Thursday Feb 24, 2005 (TSX: FTT) Sector Perform Average Price: $35.25 Target: $37.75
Finning reported Q4 2004 revenue of $1,075M, normalized EBIT of $61M and normalized EPS of $0.42. Those results were below our expectations. As such, we are reducing our rating from
Outperform to Sector Perform.

scotia Finning reported fourth quarter "normalized" earnings of $0.42 per share. This was essentially unchanged from last year and below our estimate of $0.47 per share.
The company announced a 10% dividend increase, raising the annual rate to $0.44 per share.
Our target prices and rating on the shares of Finning remain intact.
Rating: -- 2-SP Risk: -- Med Target: 1-Yr -- $38.00 2-Yr -- $43.00

Sunday Feb 13, 2005 (FTT-T; C$35.45)
HOLD (unchanged); Target: C$34.40 (unchanged)
CAT Formalizes Global Pipeline Dealership

sm Wednesday Dec 15, 2004 (FTT-T C$34.50) Investor Day Highlights
Expected increase in parts and service activity, combined with expected cost cutting, are likely to drive higher earnings growth in 2006 and beyond.
Rating: 2-SP Risk: Med Target: 1-Yr $37.50 2-Yr $42.50

td (FTT-T; C$34.50) HOLD Target: C$34.40 Robust Outlook Tempered by Cost Pressures

Thursday Feb 5, 2004 Finning International Inc. (FTT - $30.00) Rating: 2-Sector Perform Target: $35.00
Q4 Results Disappointing
Finning reported Q4 EPS of $0.42 per share compared with earnings of $0.46 per share last year. Results were below our expectations. Weakness in U.K. operations due to competition and a significant drag from currency were the reasons for the shortfall. On a more positive note, the company experienced strength in other areas. Canadian operations reflect ongoing strength in the mining and gas compression areas, and a growing rental business. South American operations reflect the 2003 acquisitions of the Caterpillar dealerships in Argentina, Uruguay and Bolivia. With respect to the outlook for 2004, the company's backlog of new equipment, power systems, and materials handling units at year-end was $420 million compared with $300 million at the same time last year. We believe that continued strength in commodity prices will contribute to strength in both Canadian and South American operations. Nevertheless, currency has led us to reduce our earnings forecast and target price. We have reduced our 2004 and 2005 EPS estimates to $1.85 ($1.95) and $2.10 (was $2.20), respectively. We now rate the shares a 2-Sector Perform (previously 1-Sector Outperform).

Wednesday Jul 23, 2003 Finning International Inc. (FTT - $31.20)
Rating: 1-Sector Outperform Target: $36.00
Record Q2 EPS
Finning reported Q2/03 EPS of $0.46 compared with earnings of $0.44 per share in Q2/02. Consolidated revenue grew 8% year-over-year. Sales growth was driven by a 14.8% increase in Canadian revenues and an 18.6% increase in U.K. revenues offset somewhat by weakness in the company's South American operations. Sales in the oil sands and a pick-up in conventional oil and gas activity accounted for the strength in the company's Canadian operations. Strength in the construction sector was the underlying driver in the U.K. The lower sales in South America are the result of delays in new orders. Subsequent to the end of the quarter, the company announced a $55 million contract in that region. Strong top line growth did not translate into stronger earnings growth due to pressure in the company's margins. Margins declined due to a product mix shift towards lower margin new equipment sales. The company's parts and service business is more profitable than new equipment sales. Strong new equipment sales bode well for future parts and service revenue growth. We believe the company will continue to gain momentum as the year progresses. We are maintaining our 2003 and 2004 EPS estimates of $1.90 and $2.18, respectively. We have increased out target price to $36 from $34 per share. –– Murray Gainer
The Research Analyst/Associate, in his/her own account or in a related account, owns securities of the following companies.

Tuesday Apr 29, 2003 Finning International (FTT : TSX : $27.00)
Net Change: 0.35, % Change: 1.31%, Volume: 321,200
Finning firmed Monday on the news that the heavy equipment distributor made an acquisition in the UK. Finning has agreed to acquire the business and most of the assets of Lex Harvey Ltd. for $200 million. Lex Harvey is a provider of materials handline solutions in the UK, and will be integrated with Finning’s UK materials handling division. The combined operations will have pro-forma revenues of $340 million, 16,000 machines, and 1,300 employees. The deal is expected to raise FTT’s total revenues for 2003 to $1.0 billion.

Saturday Apr 26, 2003 Finning International Inc. (FTT - $26.80) Rating: 1-Sector Outperformer Target: $33.00
Significant Strength in Q1 Results
Finning reported Q1/03 EPS of $0.44 per share, which includes $0.09 in net one-time gains. Operating earnings were therefore $0.36 per share compared with $0.30 per share in Q1/02. Results were ahead of our $0.32 per share estimate. Consolidated revenues increased 13.3% YOY in part due to acquisitions. Canadian revenues increased 15% and were driven by strong demand from Canadian oil sands projects. Package sales into this burgeoning market tend to carry lower margins, so EBIT (earnings before interest and taxes) from Canadian operations fell YOY. We anticipate Canadian operations to be stronger through the year driven by demand from oil sand projects. The company's U.K. operations were strong on numerous infrastructure building programs in that country. Profitability at its South American operations was also up YOY. We have increased our 2003 EPS estimate to $1.85 from $1.80 per share based on the company's stronger Q1 results.  Murray Gainer

Thursday Jan 30, 2003 Finning International Ltd. (FTT - $23.59) Rating: 1-Sector Outperformer Target: $33.00
Q4 Results, Dividend Increase
Finning reported Q4 EPS of $0.47 before special charges, compared with $0.39 last year. Revenues declined 2.5% in the quarter, while the company's operating profit rose 21.7%. The quarterly results reflect a mix shift in business towards the higher margin equipment rental business. The company's strong U.K. operations offset some weakness in Canada and South America. We expect the Canadian and South American operations to strengthen as new mining projects come on line over the next few years. The Alberta oil sands continues to represent a significant opportunity for the company. Our 2003 EPS estimate of $1.78 compares with reported earnings of $1.78 for 2002. The company remains well positioned to deliver persistent earnings growth over the next few years. Finning also announced an increase in its quarterly dividend to $0.09 per share from $0.08 per share.

Thursday Jan 30, 2003 Finning International (FTT : TSX : $23.59)
Net Change: -0.21, % Change: -0.88%, Volume: 237,900 Shares pulled back slightly after the Caterpillar (CAT) dealer’s earnings report. Fourth quarter revenues declined 2.4% to $847.7 million. While net income rose 3.5% to $31.2 million, or $0.40 per share, they fell short of the First Call estimate of $0.44 per share. Finning raised its dividend by12.5% to $0.09 per share per quarter, or $0.36 per year.

Sunday Dec 1, 2002 cbc
FINNING SHARES DOWN ON ASSET SALE Shares of heavy-equipment dealer Finning International Inc. dropped by almost 4 per cent in afternoon trading after the company said it was selling assets to cut debt and free up some cash flow.

Wednesday Nov 27, 2002 Finning International Inc. (FTT - $23.14) Recommendation: 1-Strong Buy Target: $32.00
South American Acquistions
The acquisitions of the Caterpillar dealerships in each of Argentina, Bolivia, and Uruguay diversify the operations of Finning within South America and extend Finning's overall growth profile. The acquisitions are expected to close within 60 days. Revenues for the three regions are forecast at $110 million for this year. Finning notes that the combined revenues for the three regions in 1998 were $300 million and that a substantial drop in construction activity is the reason for the decline. To provide some perspective and scale, Finning's existing Chilean operations are expected to report revenue of $450 million for the current year. The company's consolidated revenues for 2002 should exceed $3.2 billion. We are not adjusting our 2002 EPS estimate, which stands at $1.62, up $1.47 in 2002. The acquisition should be mildly accretive to 2004 earnings. –– Murray D. Gainer

Feb 1 Finning International Inc. (FTT - $22.20) Recommendation: 1-Strong Buy Target: $27.00 Finning reported fourth quarter and full year 2001 results that were in-line with expectations yesterday supporting our 1-Strong Buy recommendation and target prices of $27.00 one year out and $31.00 in two years. We expect modest earnings growth in 2002 in a sluggish economic environment, ramping to mid-teen earnings growth in 2003 as industrial demand picks up. Visible revenue and profit pick-ups can be seen via the Canadian oil sands projects as well as in the UK from the company’s ownership position in Hewden Stuart, which will look after the sales and servicing of smaller equipment there, improving efficiency. We are encouraged by Finning’s ability to maintain modest growth in a slower economy and expect the company to benefit from an improving environment over the next 12 months as commodity prices rise and industrial production picks up. –– Murray Gainer

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