Joy Global Inc.
) reported adjusted earnings of $1.11 per share in the fourth
quarter of fiscal 2013, compared with $2.10 per share in the
year-ago quarter. Earnings came in line with the Zacks Consensus
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Joy Global's fiscal 2013 adjusted earnings were $5.83 per share,
compared with $7.44 per share in fiscal 2012. Earnings were a
cent lower than the Zacks Consensus Estimate of $5.84.
GAAP earnings per share for the fourth quarter were 25 cents and
for the fiscal were $4.99 compared with $1.99 and $7.13
respectively in the comparable year-ago period.
Joy Global reported net sales of $1,181.8 million in the fourth
quarter of fiscal 2013 versus $1,594.9 million a year ago,
reflecting a year-over-year decline of 25.9%.
The top line was ahead of the Zacks Consensus Estimate of $1,114
million for the fourth quarter.
Joy Global reported net sales of $5,012.7 million for fiscal 2013
versus $5,660.9 million reported in fiscal 2012, which reflected
a decline of 11.5%. With this the company beat the Zacks
Consensus Estimate of $4,938 million.
The year-over-year decline in sales was due to lower aftermarket
as well as original equipment sales. In addition, unfavorable
exchange rates impacted the company's sales numbers .
Highlights of the Release
Joy Global's operating profit in the fiscal was $0.8 billion
versus $1.2 billion in the year-ago period, reflecting a
year-over-year decline of 29.9%. The decrease in operating profit
was due to lower sales volumes, an unfavorable product mix, and
less favorable manufacturing cost absorption, partially offset by
reduced product development, and selling and administrative
Total bookings at Joy Global during the fiscal year were $3.9
billion, down 23% from the previous fiscal year-end level of
$5.07 billion. The 17.3% and 28.1% respective decline in orders
from Joy Global's legacy underground and surface businesses led
to the overall shortfall.
Total backlog at the end of fiscal fourth quarter was $1.5
billion, reflecting a decline of 25.9% from the comparable
The company continued with its shareholder friendly moves by
repurchasing 4.1 million shares worth $214 million. The company
still has $786 million remaining in its share repurchase coffer.
Net interest expense in fiscal 2013 was $57.5 million, down from
$67.4 million in the previous fiscal. The decline in expenses was
primarily due to a lower debt level.
Cash and cash equivalents of Joy Global as of Oct 25, 2013, were
$405.7 million versus $263.9 million as of Oct 26, 2012.
Cash provided by operating activities during fiscal 2012 was
$638.5 million versus $463.9 million provided in the previous
Capital expenditures were $153 million in fiscal 2013, compared
with $242 million in the prior year. The decline was due to the
company's prudent cost management in the wake of declining demand
for mining equipment.
Joy Global expects revenue to range from $3.6 billion to $3.8
billion for fiscal 2014. The company expects fiscal 2014 earnings
per share between $3.00 and $3.50.
The fiscal 2014 guidance is below what it achieved in fiscal
2013. Joy Global is taking a cautious stance going into fiscal
2014. The rationale behind a conservative guidance is that the
company is still unsure regarding the timing of demand recovery.
Fiscal 2013 was impacted by a supply glut, which is expected to
continue into the first half of fiscal 2014.
Fiscal 2013 has been another difficult year for Joy Global.
Depleting backlogs and decline in orders from some of the key
markets pulled back results. Even though the company
surpassed our sales expectation, the decline in yearly bookings
and total backlog is our major concern.
The company's initiative to move its production capability
towards areas which have higher growth potential is appreciable.
However, in the present market scenario it will be very difficult
to predict a turnaround in demand for mining equipment.
Joy Global currently has Zacks Rank #3 (Hold). Some better-ranked
stocks in the sector include
H&E Equipment Services Inc.
Alamo Group, Inc.
). All these stocks hold a Zacks Rank #2 (Buy).