Underground orders power Joy

STRONG underground orders have driven overall bookings to more than US$530 million, steering original equipment manufacturer Joy Global to a net income of $16.3 million for the third quarter.
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Angie Tomlinson

As usual Joy’s largest chunk of coal related revenues were sourced from the underground North American market, which continues to strengthen.

International markets remained robust, with emerging markets such as China still offering long term growth opportunities. Incoming orders were strong in the US, Australia and China.

Net income was 150% above third quarter 2003 earnings and net sales also increased 27% on last year to $382 million. Underground revenues lifted 36% on the 2003 comparable quarter.

For the third consecutive quarter, original equipment orders were very strong, increasing 430% over the third quarter of fiscal 2003. This increase was largely driven by underground machinery operations where original equipment orders increased by almost $180 million.

“Successive quarters of solid strength in our orders leads us to expect improvements in our operating results over at least the next few quarters. Nonetheless, there will continue to be challenges in production constraints and increasing raw material costs,” said Joy Global CEO John Hanson.

In the US market, orders have been by and large replacement equipment, however limited discussions of mine re-openings and new mine developments have begun to take place – putting Joy in good stead.

In developing markets, it is expected orders from China in fiscal 2004 for underground equipment and aftermarket services will total more than $150 million, double the comparable fiscal 2003 revenues.

Joy lifted its 12-month outlook for the sixth consecutive quarter, with total revenues for the upcoming 12 months expected to be $1.6 to $1.8 billion. Operating income for the 12 months is forecast at $137 to $165 million.

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