Joy Global Q1 Results Miss Estimates, But Backs 2014 Outlook

(RTTNews) - Mining equipment maker Joy Global, Inc. (JOY) reported Thursday a profit for the first quarter that plunged from last year, reflecting significantly lower operating margins and double-digit sales decline amid drop in order bookings. Both earnings per share and quarterly sales missed analysts' expectations. However, the company maintained its earnings and sales guidance for the full-year 2014.

"While comparison with the first quarter of fiscal 2013 is difficult, I am pleased with our team's execution against plan in what is expected to be our slowest quarter of the fiscal year. During the quarter we continued to move forward on our cost reduction programs which will help mitigate the impact from lower volumes during the year," President and CEO Ted Doheny said.

The Milwaukee, Wisconsin-based mining solutions provider reported net income of $48.86 million or $0.48 per share for the first quarter, sharply lower than $142.14 million or $1.33 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $50.1 million or $0.49 per share, compared to $139.9 million or $1.31 per share in the year-ago quarter.

On average, 22 analysts polled by Thomson Reuters expected the company to report earnings of $0.64 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter decreased 27 percent to $839.31 million from $1.15 billion in the same quarter last year, and missed seventeen Wall Street analysts' consensus estimate of $835.38 million.

On an operational basis, surface mining equipment registered sales drop of 33.8 percent, and underground mining machinery sales declined 19.1 percent from last year.

On a product stream basis, service revenues declined 8.5 percent, and original equipment revenues plunged 49.2 percent from last year.

Geographically, Joy Global's domestic sales decreased 27.7 percent, and international sales declined 26.6 percent from a year ago.

Operating margins for the quarter contracted 900 basis points to 10.2 percent from last year's 19.2 percent.

Orders bookings for the quarter declined 16 percent to $860.5 million from last year. The company ended the first quarter with total backlog of $1.50 billion, compared to $1.48 billion at end of the previous quarter.

Looking ahead to fiscal 2014, the company continues to expects adjusted earnings in a range of $3.10 to $3.50 per share, on projected revenues between $3.6 billion and $3.8 billion. Street is currently looking for full-year 2014 earnings of $3.29 per share on annual revenues of $3.72 billion.

"In addition, our continued execution of operational excellence and One Joy Global initiatives will position us well when market demand increases and provides us with the ability to generate improved leverage on future growth opportunities," Doheny added.

JOY closed Wednesday's regular trading session at $55.79, up $0.52 on a volume of 2.34 million shares. In the past 52-week period, the stock has been trading in a range of $47.83 to $63.49.