Mining equipment maker Joy Global Inc. (JOY: Quote) reported Wednesday a slight decline in first-quarter profit, while adjusted earnings per share topped Wall Street estimates. Sales edged up and beat analysts' estimates on growth in surface mining equipment sales. Meanwhile, orders plunged mainly due to weak U.S. market. Further, the company backed its fiscal 2013 forecast.
In its first quarter, net income attributable to Joy Global was $142.14 million, slightly lower than last year's $142.35 million. Earnings per share remained flat at $1.33.
Excluding certain acquisition activities and unusual items as well as loss from discontinued operations, first-quarter income increased to $139.9 million or $1.31 per share from $135.4 million or $1.26 per share in the previous year.
On average, 19 analysts polled by Thomson Reuters expected earnings of $1.14 per share for the quarter. Analysts' estimates typically exclude one-time items.
Operating income grew 3 percent and operating margin improved to 19.2 percent from prior year's 18.8 percent.
Quarterly net sales edged up 1.2 percent to $1.15 billion from $1.14 billion a year back, while analysts' consensus estimates was $1.08 billion.
Original equipment sales increased 3 percent, while aftermarket sales decreased 1 percent. Changes in foreign exchange rates had a positive impact on the sales, the company said.
In the quarter, net sales of underground mining machinery declined 8 percent as original equipment sales were hurt by a soft U.S. coal market partially offset by higher shipments in Australia. Lower aftermarket sales in the U.S. were partially offset by increased shipments in China, Australia and Africa.
Net sales of surface mining equipment, however, grew 14 percent with growth in original equipment and aftermarket sales in all regions except China and North America.
Meanwhile, first-quarter bookings dropped 29 percent year-on-year to $1 billion. Excluding IMM, orders decreased 32 percent with sharp decline in both aftermarket and original equipment orders.
The company's backlog at the end of the first quarter was $2.4 billion, compared to $2.6 billion at the beginning of fiscal 2013.
Mike Sutherlin, president and chief executive officer, said, "Our results for the first quarter demonstrate continued strong execution. We are also starting to see benefits from strategic actions to lower our cost base. Both are important as we continue to adjust to headwinds in the mining sector."
Looking ahead to fiscal 2013, the company said that it continues to be comfortable with previous guidance of earnings per share between $5.75 and $6.35 on revenues of $4.9 billion to $5.2 billion. Analysts project earnings of $6.19 per share, and revenues of $5.07 billion for the year.
The outlook is based on the company's confidence that at least one or two major projects will add to 2013 bookings and that it expects aftermarket orders to recover from the first quarter levels, but they may not reach last year's level for the full year.
"While some regions have underperformed, we are seeing encouraging signs from the U.S. coal market," the company noted.
Joy Global shares closed Tuesday's trading at $59.96, up $0.26 or 0.44 percent.
by RTT Staff Writer
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