This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Joy Global Inc. Announces Fourth Quarter And Fiscal 2012 Year-End Operating Results

Stocks in this article: JOY

The Company has seen significant adjustments in some of its core markets. In the U.S., weak demand for electricity combined with a plentiful supply of natural gas reduced natural gas prices to historically low levels. The share of power generation from coal dropped from 43 percent to 33 percent by April of 2012, reducing the demand for thermal coal in the U.S. by approximately 100 to 120 million tons. Natural gas has since risen above $3.50 per million BTU’s, and coal recovered its share back to 38 percent of power generation by September. The economics of power switching enable coal from the Powder River Basin to compete when natural gas prices rise above $2.50 and enable coal from the Illinois Basin to compete when natural gas prices rise above $3.00. However, thermal coal from Central Appalachia is not competitive until natural gas prices rise above $4.00 per million BTU’s and therefore it has the lowest prospect of recovering lost volume for power generation. This shift is reflected in the demand for coal-fueled power generation, with year-to-date generation from Central Appalachian coal down 40 percent while generation from the rest of the U.S. is down only 10 percent. Thermal coal volumes in Central Appalachia are expected to decline over time until it becomes primarily a metallurgical coal producing region. Volumes will continue to shift to the Illinois Basin and Powder River Basin. Cutting conditions and operating costs improve as production migrates west, and this will reduce the Company’s revenue potential per ton of production. Although some volumes can be recovered to provide further upside through time, the Company is planning for U.S. coal to be a structurally smaller and significantly dislocated market.

The slowing of economic growth and industrial production in China has reduced the demand for thermal coal used in power generation. By the third calendar quarter, demand growth was almost flat with the prior year while domestic production continued to increase, and stockpiles rose to maximum levels at the domestic transfer port of Qinhuangdao. Domestic production was curtailed as prices dropped below $95 a tonne, creating a competitive advantage for seaborne coal. The reduced volumes of China domestic production have adversely affected demand for products from the Company’s IMM subsidiary. Domestic production has been further curtailed by holidays with respect to the regime change in China. Although the reduction in domestic production created support for imports, it was not enough to overcome the additional supply returning to the market from Australia and from U.S. producers looking for export markets. As a result, seaborne thermal coal has remained in surplus with prices depressed.

10 of 17

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs