Joy Global Inc
) reported adjusted earnings of 49 cents per share in the first
quarter of fiscal 2014. The earnings compare unfavorably with
$1.31 per share in the year-ago quarter.
Earnings were 23.4% lower the Zacks Consensus Estimate of 64
Joy Global reported net sales of $0.84 billion in the reported
quarter, down 26.9% from $1.15 billion from a year ago. The
decline was due to lower contribution from the Underground Mining
Machinery (down 19.1%) and Surface Mining Equipment (down 33.8%)
Softness in demand persists in the global mining market.
Geographically, revenue contributions decreased 27.7% year over
year to $308.9 million from the United States and by 26.6% to
$530.4 million from Rest of the World. Original equipment sales
fell significantly by 49.2% and services dropped 8.5% year over
Net sales in the reported quarter surpassed the Zacks Consensus
forecast of $0.81 billion by 3.7%.
Booking in the fiscal first quarter dropped 16% from the
comparable previous year quarter. Underground Mining Machinery
booking declined 24.7% year over year to $451.0 million, while
Surface Mining booking declined 13.8% year over year to $433.5
Backlog at the end of the quarter was $1.5 billion, in-line with
backlog at the beginning of the quarter.
During the reported quarter, cost of sales declined 21.8% to
$604.2 million from $773.1 million a year ago. Product
development, selling and administrative expenses declined 2.7%
year over year. The decline in expenses was a function of the
cost savings initiatives undertaken by Joy Global.
Interest expenses during the quarter declined by 8.6% to $13.8
Joy Global's cash and cash equivalents as of Jan 31, 2014, were
$290.9 million versus $405.7 million as of Oct 25, 2013.
Long-term debt as of Jan 31, 2014, was $1.24 billion, decreasing
marginally from the year-end figure of $1.25 billion.
Net cash from operating activities was $64.9 million in the first
quarter of fiscal 2014, compared with $90.5 million in the
prior-year quarter. The decline in cash from operating activities
was primarily attributable to lower net income and unfavorable
working capital changes.
Capital expenditure at Joy Global for the fiscal first quarter
was $27 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 expect its fiscal 2014 total revenue in the range of
$3.6 billion to $3.8 billion.
Excluding restructuring charges and unusual items earnings per
diluted share are expected between $3.10 and $3.50.
Joy Global expects to continue with its share repurchase program
in fiscal 2014 as it is hopeful to generate ample cash flow to
fund its buyback program.
Other Company Releases
Astec Industries Inc
) reported earnings of 36 cents per share in the fourth quarter
of 2013, beating the Zacks Consensus Estimate of 31 cents by
) announced fourth quarter 2013 operating earnings of $1.54 per
share, beating the Zacks Consensus Estimate of $1.29 by 19.4%.
H&E Equipment Services Inc.
) announced fourth quarter 2013 operating earnings of 41 cents
per share, beating the Zacks Consensus Estimate by a penny.
Joy Global missed earnings estimates in the fiscal first quarter
as reduction in demand continues to be a headache for the mining
The global outlook holds promise for the mining equipment
manufacturers, but at the same time supply glut of commodities in
the global market is putting a downward pressure on prices and
lowering demand for the mining equipment.
However, the global steel production is expected to grow by 3.3%
in 2014 and sudden rise in natural gas price in U.S. could
increase mining operation and act as a positive catalyst for the
Joy Global currently has a Zacks Rank #2 (Buy).
ASTEC INDS INC (ASTE): Free Stock Analysis
CATERPILLAR INC (CAT): Free Stock Analysis
H&E EQUIP SVCS (HEES): Free Stock Analysis
JOY GLOBAL INC (JOY): Free Stock Analysis
To read this article on Zacks.com click here.