Joy Global Lifts Guidance; View Still Murky
MILWAUKEE (TheStreet) -- Joy Global (JOYG) , the mining-equipment maker, said today that its profit grew 10% in its fiscal third quarter on strong sales to China. The company also lifted its earnings guidance for the rest of the year.
Shares of the company climbed in pre-market trading Wednesday, changing hands recently at $38.50, up $1.19, or 3.2%, from the previous session's close.
Still, gazing into its crystal ball, Joy Global suggested that the outlook remained almost as murky as ever. The company also seemed to indicate that its strong results in the third quarter may be an anomaly, at least in the near term.
"We continue to be encouraged by more positive signs coming from both the global economy and the commodity markets," said Joy Global boss Mike Sutherlin in the company's press release. "However, it is too soon to determine whether this will lead to recovery or is the start of a period of bumping along the bottom."
Joy Global was more hopeful about overseas mining business than that in the U.S. "Despite an improved outlook for the international markets, we see little opportunity for the U.S. market, especially thermal coal, through 2010."
Because Joy Global expects the pace of new equipment orders to lag behind shipping levels, Joy Global said it expects to eat into its backlog next year. Therefore, the company said, "we continue to see 2010 as a year of lower revenues."
Joy Global still expects to meet its previous revenue guidance for 2009 -- $3.5 billion to $3.6 billion. But because of severe cost-cutting measures, the company raised its earnings per-share forecast for the year. It's now predicting a range between $4 and $4.20, up from an initial target of $3.80 to $4.
The company attributed its strong third-quarter results to China's stimulus package, which served to boost demand for its heavy machinery at mines around the world.
Net income came to $124 million, or $1.21 a share, easily topping analysts' per-share expectations of a 95-cent profit. A year ago, the company made $113 million, or $1.03 a share.
Sales rose 6% to $956 million from a year ago, also surpassing Wall Street targets of $902.4 million.
Joy Global said it received new orders in the third quarter worth $683 million. Of that sum, $39 million in orders were canceled, most of that from mines in the Appalachian region. In the year-ago third period, Joy Global booked $1.5 billion in new orders.
-- Written by Scott Eden in New York
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Scott Eden has covered business -- both large and small -- for more than a decade. Prior to joining TheStreet.com, he worked as a features reporter for Dealmaker and Trader Monthly magazines. Before that, he wrote for the Chicago Reader, that city's weekly paper. Early in his career, he was a staff reporter at the Dow Jones News Service. His reporting has appeared in The Wall Street Journal, Men's Journal, the St. Petersburg (Fla.) Times, and the Believer magazine, among other publications. He's also the author of Touchdown Jesus (Simon & Schuster, 2005), a nonfiction book about Notre Dame football fans and the business and politics of big-time college sports. He has degrees from Notre Dame and Washington University in St. Louis.
