Monday, December 13, 2010

Joy Global (NYSE: JOYG): Q4 Earnings Preview 2010

. Monday, December 13, 2010

By Stock Wizard

Joy Global Inc. (NYSE: JOYG) is scheduled to release its fiscal fourth- quarter earnings before the opening bell on Wednesday, December 15, 2010. Analysts, on average, expect the company to report earnings of $1.16 per share on revenue of $924.11 million. In the year ago quarter, the company reported earnings of $1.20 per share on revenue of $963.53 million.

Joy Global Inc. engages in the manufacture and servicing of mining equipment for the extraction of coal, and other minerals and ores worldwide. The company operates in three segments: Underground Mining Machinery, Surface Mining Equipment, and Crushing and Conveying. Underground equipment makes up almost half of the company's net revenue.

In the preceding fiscal third-quarter, the Milwaukee, Wisconsin-based company's net income was $118.5 million, or $1.13 a share, compared to $124.3 million, or $1.21 a share, in the year-ago quarter. Revenue decreased 11% to $850 million from $956.39 million. Analysts, on average, expected the company to report earnings of $1.02 per share on revenue of $878.20 million. New orders in the third quarter jumped 51% to $973 million, with original equipment orders more than doubling and after-market orders rising 20%.

The company's efforts to grab more business in the booming steel and power producing markets in China are paying off, allowing it to raise profit and revenue targets. At its last earnings call in September, the company boosted its fiscal 2010 outlook. Joy Global said that it expects earnings between $4.10 and $4.15 per share, up from its previous forecast in the range of $3.85 to $4.00 per share. The company’s revised full-year revenue outlook lies within the range of $3.35 to $3.4 billion, compared to the previous guidance of $3.3 billion to $3.4 billion.

Joy Global is likely to benefit from a rebound in commodity markets and a faster-than-expected economic recovery. Commodity prices directly impact the demand for Joy Global's products and services. Renewed levels of spending are also taking place in the mining equipment industry. After putting off upgrades and repairs due to weak commodity prices, miners are beginning to spend money on equipments now that coal, copper, and iron ore prices have recovered.Its portfolio is dominated by the coal industry, which accounts for three-quarters of revenues.

In terms of stock performance, Joy Global shares are up nearly 51% since the beginning of the year.

Disclosure: None.

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