Mining solutions provider Joy Global Inc. (JOY: Quote) reported Wednesday a higher profit for its third quarter benefited by strong sales growth in its legacy business as well as the contribution from its acquisitions of LeTourneau, and IMM. Quarterly earnings per share and top line, however, missed Wall Street estimates. Citing deteriorating China demand, the company trimmed its fiscal 2012 forecast.
President and Chief Executive Officer Mike Sutherlin said, "Our results this quarter continue to show strong execution, but against a market backdrop of adjustment to lower demand for U.S. coal and continued slowing of the Chinese economy. The original equipment order rate is impacted by a project pipeline that has slowed but still has several new projects that should reach equipment selection in the near term."
For the third quarter, net income attributable to the company grew to $193.52 million or $1.81 per share from $173.10 million or $1.62 per share last year.
On average, 16 analysts polled by Thomson Reuters expected earnings of $1.88 per share for the quarter. Analysts' estimates typically exclude one-time items.
Net sales climbed 22 percent to $1.39 billion with strong growth in Surface Mining Equipment's sales and LeTourneau, and initial sales from IMM. This was despite a negative impact from changes in foreign exchange rates. Meanwhile, analysts were looking for sales of $1.42 billion.
Sales from legacy business, excluding LeTourneau and IMM, increased 10.6 percent to $1.21 billion. In the underground mining machinery segment, original equipment sales were driven by higher shipments in Australia partly offset by lower shipments in Eurasia and China.
Net sales of surface mining equipment surged with strong results in original equipment sales in all regions except South Africa.
Reduced aftermarket orders in the U.S. have been mostly offset by increased orders from international markets.
In the quarter, bookings plunged 25 percent to $1.1 billion reflecting a 34.8 percent drop in legacy business, while the company projects booking in LeTourneau to nearly quadruple.
Backlog at the end of the third quarter was $2.8 billion, compared to $3.1 billion at the end of the second quarter.
Looking ahead, Joy Global now expects full-year adjusted earnings per share of $7.05 to $7.20 on revenue of $5.45 billion to $5.55 billion. Including restructuring charges, earnings per share would range between $6.92 and $7.07. The company previously expected earnings per share between $7.15 and $7.45 on revenues in a range of $5.5 to $5.7 billion.
Analysts project fiscal 2012 earnings of $7.26 per share and revenue of $5.56 billion.
Sutherlin added, "Although the U.S. market has progressed in line with our expectations, the deceleration of China demand has deteriorated international markets more quickly and severely than previously expected."
Further ahead, the company projects fiscal year 2013 revenues to be flat to down slightly under a continuation of current market conditions.
In pre-market activity, Joy Global shares lost $1.57 or 2.96 percent, and are currently trading at $51.50.
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by RTT Staff Writer
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