Joy Global Q4 Profit Down, Misses Estimates; Sees Sharply Lower Results In FY14

(RTTNews) - Mining equipment maker Joy Global Inc. (JOY) reported Wednesday a sharp decline in fourth-quarter profit, reflecting a significant charge as well as sharply lower net sales. Adjusted earnings per share missed analysts' estimates, while top line beat their view.

For fiscal 2014, the company projects adjusted earnings sharply lower than last year, and below analysts' view. The company also plans additional restructuring actions for the new year.

In pre-market activity, Joy Global shares declined $1.51 or 2.68 percent, and traded at $54.73.

The fourth-quarter net income attributable to the company was $26.83 million or $0.25 per share, sharply lower than last year's $212.56 million or $1.99 per share. The latest quarter results included a $155 million pretax non-cash intangible asset impairment charge associated with the Joy Global branding initiative.

Adjusted earnings, which excluded items, were $117.8 million or $1.11 per share for the latest period, compared to $225.2 million or $2.10 per share a year ago.

On average, 21 analysts polled by Thomson Reuters expected earnings per share of $1.12 for the quarter. Analysts' estimates typically exclude one-time items.

The company's net sales declined 26 percent to $1.18 billion from $1.59 billion a year before, while analysts estimated revenues of $1.12 billion.

Original equipment sales decreased 38 percent and aftermarket sales decreased 14 percent. According to the company, the changes in foreign exchange rates lowered net sales by 3 percent in the quarter.

The aftermarket sales decline was primarily due to weak sales in China.

Total bookings for the quarter declined 19 percent year-over-year to $1.08 billion with lower bookings in all its products and segments. Backlog at the end of the fourth quarter was $1.5 billion, compared to $1.6 billion at the beginning of the fourth quarter.

For fiscal 2013, the company's attributable profit was $533.71 million or $4.99 per share, compared to last year's $762.02 million or $7.13 per share. Adjusted earnings per share in the current year totaled $5.83. Net sales decreased 12 percent to $5.01 billion.

Looking ahead, for fiscal 2014, Joy Global expects adjusted earnings per share to be in the range of $3.00 to $3.50, and revenues to range between $3.6 billion and $3.8 billion. Analysts project annual earnings per share of $3.68 and revenues of $3.8 billion.

Joy Global noted that its first fiscal quarter has a disproportional number of holidays that reduces production volumes but not costs. The company also expects many of its customers to take full shutdowns during these holiday periods to further balance supply and demand which will add to the pressure on the first quarter.

Joy Global said that it will take additional restructuring actions in 2014, with costs expected to be approximately $15 million.

"Our strong cash position heading into fiscal 2014 and solid cash generation during the year will position us to continue to execute on our share repurchase program," the company said.