Joy Global Inc.
) reported adjusted earnings of $1.70 per share in the third
quarter of fiscal 2013. The earnings compare unfavorably with
$1.87 per share in the year-ago quarter.
However, earnings were 25.0% above the Zacks Consensus Estimate
Joy Global reported net sales of $1.32 billion in the reported
quarter, down 4.9% from $1.39 billion from a year ago. The
decline was due to lower contribution from the Underground Mining
Machinery (down 4.2%) and Surface Mining Equipment (down 5.1%)
Geographically, revenue contributions decreased 10.9% year over
year to $526.4 million from the United States and by 0.5% to
$794.1 million from Rest of the World. Original equipment sales
fell 8% and aftermarket sales dropped 2% year over year.
Net sales in the reported quarter surpassed the Zacks Consensus
forecast of $1.17 billion.
Booking in the fiscal third quarter dropped 36% from the
comparable previous year quarter. Original equipment booking
declined 76% year over year to $96.3 million, while aftermarket
booking declined 13.2% year over year to $599.1 million.
Backlog at the end of the quarter was $1.58 billion, decreasing
sequentially from $2.2 billion and year over year from $2.56
billion at the end third quarter fiscal 2012.
During the reported quarter, cost of sales declined 3.6% to $0.88
billion from $0.91 billion a year ago. Product development,
selling and administrative expenses declined 6.8% year over year.
Operating margin decreased 79 basis points from the comparable
Interest expenses during the quarter declined by $3.2 million to
Cash and cash equivalents as of Jul 26, 2013, were $486 million
versus $263.8 million as of Oct 26, 2012.
Long-term debt as of Jul 26, 2013, was $1.27 billion, decreasing
marginally from the year-end figure of $1.30 billion.
Net cash from operating activities was $350.7 million in the
third quarter of fiscal 2013, compared with $150.9 million in the
prior-year quarter. The increase in cash from operating
activities was primarily attributable to favorable working
Capital expenditure at Joy Global for the fiscal third quarter
was $31 million, down from $55 million in the year-ago quarter.
The mining equipment manufacturers are trying to lower their
capex to cope with this sluggish demand scenario.
Joy Global's end market has been hit by supply surplus and
declining demand growth for most of the commodities. As a
consequence, the higher cost mines are gradually going out of
However, the company reiterated its fiscal 2013 revenue forecast
in the range of $4.9 billion to $5.0 billion. The fiscal 2013
earnings of the company are expected between $5.60 and $5.80 per
share. Excluding restructuring charges, earnings per diluted
share are expected between $5.75 and $5.95.
Other Company Releases
Astec Industries Inc.
) reported earnings of 48 cents per share in the second quarter
of 2013, lagging the Zacks Consensus Estimate of 55 cents by
) announced second quarter 2013 operating earnings of $1.45 per
share, lagging the Zacks Consensus Estimate of $1.71 by 15.2%.
H&E Equipment Services Inc.
) announced second quarter 2013 operating earnings of 31 cents
per share, in-line with the Zacks Consensus Estimate.
Despite beating estimates, Joy Global continues to face declining
backlog as well as order booking. The supply glut in the global
market and fall prices of coal, metals and bulk commodities have
resulted in decline in mining operation and consequently lower
demand for mining equipment. In addition, customers have
significantly reduced their capital expenditures, which in turn
resulted in lower demand for mining equipment.
However, on the positive side, increased global steel production,
more coal used to generate power in the U.S. and reduction of
U.S. stockpile to the 5-year average are encouraging for this
mining equipment manufacturer.
Joy Global currently has a Zacks Rank #4 (Sell).
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