Joy Global Delivers Impressive Quarterly Report

Milwaukee-based Joy Global Inc. (NASDAQ:JOYG) is a high growth company in manufacturing, distributing and servicing equipment for surface mining, underground mining and bulk material conveyor systems. Joy Global is continuing to deliver on all fronts and reward its shareholders. JOYG began 2010 in the low $50s per share and is trading above $85 per share today, almost a 70% year-to-date stock gain. Here’s the earnings breakdown from today’s quarterly report:

Earnings: Increased by 18% to $1.39 per share, or $146.3 million, compared to $1.20 per share, or $124 million, in the same period a year ago.

Revenue: Increased to $1.05 billion, an increase of $85 million from the fourth quarter 2009.

Actual versus Wall Street Expectations: Earnings of $1.39 cents per share beat expectations by $.23 cents.  The consensus analyst earnings expectation was $1.16 cents per share. Revenues easily  the expected $922.8 billion revenue estimate (Thomson Reuters).

Notable Stats: Cash from operations in the fourth quarter was $211 million, as compared to $239 million in the fourth quarter of 2009.

Backlog increased to $1.8 billion at the end of the fourth quarter from $1.5 billion as of October 30, 2009 primarily due to strong fiscal 2010 bookings reported for both divisions as the global demand for commodities continues to intensify.

Mining companies have announced capital expenditures that are up 30-35% this year, and are approaching the levels of 2008.

Did You Hear That? Mike Sutherlin, President and CEO of Joy Global, stated, “The improving bookings rate supports our view that our mining customers will continue to increase their capital expenditure plans in response to strong industry fundamentals. We continue to ramp up our production to meet this expected growth in demand and, as a result, this is the first quarter in which both orders and shipments have exceeded the $1 billion threshold for us…we finished the year with increasing order rates and improving operational and financial results, and this will provide momentum into 2011.”

Commentary: Shares of JOYG have been on a steady uptrend throughout the course of 2010. The stock is up over 7% today on a very impressive and optimistic quarterly report. At the end of August, shares of JOYG bounced off the 200-day moving average as support and never looked back. Shares of JOYG are now priced above both the 50-day and 200-day moving averages. Given the fast rise in stock price, it would be prudent to look at pullbacks as potential buying opportunities in this growth play.

Disclosure: No position in JOYG.

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