Joy Global Inc.'s (JOY) fiscal third-quarter earnings rose 12% as the
mining equipment maker's revenue and margins improved, but bookings
continued to decline.
Shares fell 5.3% to $50.27 in early trading as the company lowered its
full-year earnings estimate to between $7.05 and $7.20 a share on
revenue of $5.45 billion to $5.55 billion from its May forecast of
$7.15 to $7.45 a share on revenue between $5.5 billion and $5.7
billion. Joy Global also warned that it expects fiscal 2013 revenue to
be flat or down slightly if current market conditions continue.
The stock has fallen 29% this year.
"The outlook for our business has continued to decline over the past
quarter," said President and Chief Executive Mike Sutherlin. "Although
the U.S. market has progressed in line with our expectations, the
deceleration of China demand has deteriorated international markets
more quickly and severely than previously expected."
Weak global economic growth has tempered demand for iron ore, copper
and other commodities, while coal has struggled against stiff
headwinds as natural-gas prices hit decade lows. Joy Global has seen
its bookings decline amid soft demand in the domestic aftermarket
space and a challenging international market, especially in Europe and
China. The company also has warned that it expects near-term order
rates to moderate and revenue could flatten.
Still, Joy Global saw its top- and bottom-line results rebound earlier
this year, boosted in part by acquisitions. Last year, the company
paid $1.1 billion for Rowan Cos." (RDC) LeTourneau manufacturing
operations, giving it exposure to oil- and gas-drilling equipment, and
bought International Mining Machinery Holdings Ltd. to obtain access
to smaller mine operators that typically do business with Chinese
manufacturers.
For the quarter ended July 27, Joy Global reported a profit of $193.5
million, or $1.81 a share, up from $173.1 million, or $1.62, a year
earlier. Earnings from continuing operations rose to $1.82 a share
from $1.61. Sales jumped 22% to $1.39 billion.
Analysts polled by Thomson Reuters most recently forecast earnings of
$1.88 a share on revenue of $1.42 billion.
Operating margin rose to 21.6% from 20.8%.
Sales in the underground mining equipment business climbed 2.4%. Sales
from the smaller surface mining segment were up 22%.
Order bookings, an indication of future sales, fell 25% to $1.08
billion from $1.45 billion a year earlier.
Write to Melodie Warner at melodie.warner@dowjones.com
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(END) Dow Jones Newswires
August 29, 2012 07:05 ET (11:05 GMT)
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