Joy Global’s Earnings: Fifth Consecutive Quarter of Double-Digit Growth

Joy Global Inc. (NASDAQ:JOY) reported higher profit for the third quarter as revenue showed growth. Joy Global is a manufacturer and servicer of mining equipment for the extraction of coal and other minerals and ores. The equipment is used in the mining regions globally to mine coal, copper, iron ore, oil sands, and other minerals.

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Joy Global Inc. Earnings Cheat Sheet

Results: Net income for Joy Global Inc. rose to $193.5 million ($1.81 per share) vs. $173.1 million ($1.62 per share) in the same quarter a year earlier. This marks a rise of 11.8% from the year-earlier quarter.

Revenue: Rose 22.2% to $1.39 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Joy Global Inc. reported adjusted net income of $1.82 per share. By that measure, the company fell short of mean estimate of $1.95 per share. It fell short of the average revenue estimate of $1.43 billion.

Quoting Management: “Our results this quarter continue to show strong execution, but against a market backdrop of adjustment to lower demand for U.S. coal and continued slowing of the Chinese economy”, said Mike Sutherlin, President and Chief Executive Officer. “The original equipment order rate is impacted by a project pipeline that has slowed but still has several new projects that should reach equipment selection in the near term. Reduced aftermarket orders in the U.S. have been mostly offset by increased orders from international markets. Our operating focus continues to deliver results, with profit leverage of 25 percent on a 22 percent increase in revenues, and this operating efficiency will serve us well as we address market uncertainty and volatility. Although there is evidence that both the U.S. and China markets have bottomed, we expect a recovery to be sluggish. We are therefore beginning the implementation of our prior downside planning by adjusting our operations to match current market conditions so that we can deliver performance over a range of possible outcomes.”

Key Stats:

The company has seen double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 31.8%, with the biggest boost coming in the second quarter when revenue rose 45% from the year earlier quarter.

The company has now seen its net income rise for three quarters in a row. In the second quarter, net income rose 31.9% and in the first quarter, the figure rose 39.2%.

The company has now fallen short of analyst estimates for the last three quarters. It missed the mark by 9 cents in the second quarter and by 3 cents in the first quarter.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the fourth quarter has moved up from $1.95 a share to $2.04 over the last ninety days. For the fiscal year, the average estimate has moved up from $7.44 a share to $7.62 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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