Joy Global’s 2Q profit rises 32 percent; outlook weak
Published: May 31, 2012
Tags: Joy Global
MILWAUKEE (AP) — Joy Global Inc. reported Thursday that net income jumped 31.9 percent in the second quarter as shipments increased. But the mining equipment company warned of troubles ahead due to weaker energy demand and a shift by U.S. power companies to natural gas.
The Milwaukee company, which makes and services equipment for the coal mining industry, reported earnings of $213.6 million for the three months ended April 27. That compares with $162 million for the same part of 2011.
Excluding discontinued operations, Joy Global said it earned $2.04 per share. Revenue increased 45 percent to $1.54 billion.
Analysts, who typically exclude discontinued operations, were expecting earnings of $1.95 per share on sales of $1.44 billion, according to FactSet.
Despite its strong quarter, Joy Global warned of tougher times ahead. The company cut its forecast for earnings by 35 cents per share in 2012 and revenue by $100 million. For the full year, the company expects to earn between $7.15 and $7.45 per share on revenues between $5.5 billion and $5.7 billion.
Joy Global President and CEO Mike Sutherlin said the company will now focus on trimming costs as U.S. electricity demand weakens and coal suppliers struggle to compete with cheap natural gas.
“We have been served well in the past by starting early to prepare for a range of outcomes, and this currently includes our expectation that near-term order rates will moderate, and revenues could flatten for a period,” Sutherlin said.
The company said bookings for mining equipment fell by 19.2 percent in the quarter, compared with last year’s second quarter. Orders dropped in its core underground and surface businesses, and they declined for both original and aftermarket equipment. Aftermarket orders were lower in Australia, the U.S. and Eurasia. They were higher in China and South Africa.
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