Toromont results sag, current quarter to fall short

Cost-cutting helped the Canadian industrial equipment supplier beat earnings estimates, but revenues came in below expectations.

"Our team has been effective in controlling discretionary expenses and has adjusted quickly to the current operating environment," Robert Ogilvie, Toromont's chairman and chief executive, said in a statement.

Ogilvie said that since the economy tanked in November, bookings at Toromont have been fairly stable at about half of the previous rates.

While the company is seeing some improvement in refrigeration bookings, and power systems activity is holding at prior levels, Toromont said it does not expect to see a meaningful recovery in its other businesses until next year.

"Based on current backlog and booking activity, results for the fourth quarter of 2009 are expected to fall short of the record results reported in 2008," Ogilvie said.

Toromont profit fell 14 percent to C$31.9 million ($30.1 million), or 50 Canadian cents a share, for the third quarter, ended Sept. 30. That was down from C$37.1 million, or 57 Canadian cents a share, a year earlier.

Revenue dropped 26 percent to C$429.9 million.

Analysts, on average, had expected earnings of 45 Canadian cents a share, on revenue of C$466.8 million, according to Thomson Reuters I/B/E/S.

Shares in the Concord, Ontario-based company, which sells, rents and services a broad range of Caterpillar heavy construction and industrial equipment, and makes and installs compression systems, were down 22 Canadian cents at C$24.80 on the Toronto Stock Exchange after the results were released.

Booking activity in the company's compression group was down 64 percent from a year earlier on lower demand for natural gas compression in the United States and Canada. Backlogs were down 47 percent from Dec. 31.

Equipment group bookings fell 46 percent from the year earlier period. Backlogs for the group were 23 percent lower than at Dec. 31.

Earlier this month, Toromont made a C$597 million offer to buy Enerflex after friendly talks for a deal with the management of the supplier of equipment for the oil and gas industry collapsed. Enerflex said it had formed a special committee of independent directors to consider the bid.

($1=$1.06 Canadian)

(Reporting by John McCrank; editing by Rob Wilson)