Joy Global (JOY) Misses Q3 Expectations, Cuts Views as Macro Uncertainty, Slow Recovery Weigh
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Joy Global (NYSE: JOY) is slumping in early Wednesday trading following third-quarter 2012 and guidance that missed the market. Shares are down 2 percent ahead of the bell.
For the quarter, Joy reported a 22 percent increase in sales to $1.39 billion, from $1.14 billion in the same period last year. Amid the rise in revs, bookings slipped 25.1 percent to $1.08 billion, with the largest percentage drop coming from its Surface Mining Equipment unit.
Net profit rose 11.8 percent to $193.5 million, or $1.81 per share. Adjusting for one-time items, EPS ended up at $1.82.
Numbers compare with consensus views calling for sales of $1.43 billion and EPS of $1.88.
More importantly, investors and traders are looking at Joy's outlook. The machinery giant sees commodity demand slowing, saying, "recent economic data is mixed, but is generally consistent with low U.S. growth, Europe contracting and China decelerating." That means recent capacity expansion is bolstering supply surpluses.
Joy also noted the dire U.S. coal market and slumping nat gas prices, though the company believes "a significant portion of coal’s share loss to natural gas can be recovered as natural gas prices increase. However, this may take a couple of years."
For 2012, Joy cut its sales outlook from $5.5 billion to $5.7 billion down to a range of $5.45 billion to $5.55 billion. EPS expectations moved from $7.15 to $7.45 to a range of $7.05 to $7.20. Overall, the Street was modeling sales of $5.56 billion and EPS of $7.26.
In addition, Joy sees fiscal 2013 sales flat to slightly down from 2012. The company commented, "We will use this period as an opportunity to accelerate our strategy by consolidating capacity in traditional markets and expanding our position in those markets where we anticipate growth over the longer term. We expect to incur additional restructuring costs in 2013 which will further reduce our cost structure, and make sustainable improvement in process efficiency and margins."
Traders will be keeping an eye on Joy's peers Wednesday. Caterpillar (NYSE: CAT) and BHP Billiton (NYSE: BHP) are lower, while Deere & Co. (NYSE: DE) is relatvely flat in early trading. Last week, BHP issued a warning its its own following quarterly results. Click here for more color on that story.
For the quarter, Joy reported a 22 percent increase in sales to $1.39 billion, from $1.14 billion in the same period last year. Amid the rise in revs, bookings slipped 25.1 percent to $1.08 billion, with the largest percentage drop coming from its Surface Mining Equipment unit.
Net profit rose 11.8 percent to $193.5 million, or $1.81 per share. Adjusting for one-time items, EPS ended up at $1.82.
Numbers compare with consensus views calling for sales of $1.43 billion and EPS of $1.88.
More importantly, investors and traders are looking at Joy's outlook. The machinery giant sees commodity demand slowing, saying, "recent economic data is mixed, but is generally consistent with low U.S. growth, Europe contracting and China decelerating." That means recent capacity expansion is bolstering supply surpluses.
Joy also noted the dire U.S. coal market and slumping nat gas prices, though the company believes "a significant portion of coal’s share loss to natural gas can be recovered as natural gas prices increase. However, this may take a couple of years."
For 2012, Joy cut its sales outlook from $5.5 billion to $5.7 billion down to a range of $5.45 billion to $5.55 billion. EPS expectations moved from $7.15 to $7.45 to a range of $7.05 to $7.20. Overall, the Street was modeling sales of $5.56 billion and EPS of $7.26.
In addition, Joy sees fiscal 2013 sales flat to slightly down from 2012. The company commented, "We will use this period as an opportunity to accelerate our strategy by consolidating capacity in traditional markets and expanding our position in those markets where we anticipate growth over the longer term. We expect to incur additional restructuring costs in 2013 which will further reduce our cost structure, and make sustainable improvement in process efficiency and margins."
Traders will be keeping an eye on Joy's peers Wednesday. Caterpillar (NYSE: CAT) and BHP Billiton (NYSE: BHP) are lower, while Deere & Co. (NYSE: DE) is relatvely flat in early trading. Last week, BHP issued a warning its its own following quarterly results. Click here for more color on that story.
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