Joy Global Earnings: Profits and Revenues Climb, Yet Signs of Slowing

Joy Global Inc. (NASDAQ:JOY) reported higher profit for the second 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 $213.6 million ($2 per share) vs. $162 million ($1.52 per share) in the same quarter a year earlier. This marks a rise of 31.9% from the year-earlier quarter.

Revenue: Rose 45% to $1.54 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Joy Global Inc. beat the mean analyst estimate of $1.95 per share. It beat the average revenue estimate of $1.43 billion.

Quoting Management: “Our second quarter reflects both excellence in our execution and concerns over slowing in our markets,” said Mike Sutherlin, President and Chief Executive Officer. “Our efforts on cycle time reduction allowed us to increase shipments this quarter in our core Joy underground and P&H surface businesses by 24 percent over last year, and our focus on operating leverage delivered 24 percent operating margins in these core businesses. We are very pleased with the performance from our acquired LeTourneau and International Mining Machinery businesses, as they collectively delivered operating margins above 20 percent before first-year excess purchase accounting charges. With the U.S. market correcting quickly, and the international markets showing signs of near term slowing, we are turning our focus to trimming costs. The current order rate is affected by both project timing as well as fundamentals, and we believe there is sound basis for demand upside. However, we have been served well in the past by starting early to prepare for a range of outcomes, and this currently includes our expectation that near term order rates will moderate and revenues could flatten for a period compared to our first half run rate.”

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 31.1%, with the biggest boost coming in the most recent quarter when revenue rose 45% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the first quarter, net income rose 39.2% and in the fourth quarter of the last fiscal year, the figure rose 17.8%.

After two quarters of falling short, the company beat estimates last quarter. In the first quarter, it missed the mark by 9 cents, and in the fourth quarter of the last fiscal year, it came in under estimates by 3 cents.

Looking Forward: Expectations for the company’s next-quarter performance are higher than they were ninety days ago. Over the past three months, the average estimate for the third quarter has risen to $2.04 per share from $1.95. The average estimate for the fiscal year is $7.62 per share, a rise from $7.44 ninety days ago.

Competitors to Watch: Bucyrus Intl., Inc., Volgaburmash OAO, Ural’skiy zavod TM OAO, VBM-group OAO, Bell Equipment Limited, Yasynuvats’kyi Mashynobudivnyi Zavod VAT, Famur S.A., and Kopeyskiy mashinostroitel’nyi zavod OAO.

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

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