Joy soars in first quarter

A NET income of $US60 million, nearly triple the $22 million reported for the same quarter last year, was the icing on Joy’s financial cake for its successful first quarter.
Joy soars in first quarter Joy soars in first quarter Joy soars in first quarter Joy soars in first quarter Joy soars in first quarter

Joy 14CM15 Miner/Bolter

Donna Schmidt

The Wisconsin-based mining machinery OEM announced its positive results on Wednesday, including sales of $553 million for the current year, versus $374 million for the same period in 2005, a 48% increase.

Operating income, a measure of how well sales cover variable expenses such as the cost of materials and labour, more than doubled from $42 million to $90 million.

Joy chief John Hanson, while pleased with the first quarter results, warned investors and analysts that the remaining three quarters of 2006 would not show increases that were quite as dramatic.

“We commented in the fourth quarter earnings call that fiscal 2006 would start stronger than is typical for Joy Global,” he said.

“While the remaining quarters of fiscal 2006 will not reflect such strong year-over-year growth, we do expect that operating results will continue to reflect the robust commodity market conditions which our customers continue to enjoy.”

The company, however, was more confident in its business relating to the international coal market, particularly China, as the country “continue[s] the conversion of their coal mining industry to high-productivity mining”.

The country’s consumption, Joy executives noted, had continued an upward swing as economic environments improve and power production infrastructures grow throughout the nation.

“The company continues to experience increased activity with new mining entities in China and sees the percent of production among these large producers increasing as they take over the reserves of smaller operations and close many small mines,” it remarked.

Throughout all of its markets, Hanson summarised, Joy Global was confident: “We are continuing to experience strong demand in original equipment and for aftermarket services from our customers.

“Our efforts to increase our capacity to meet their needs have resulted in overall revenues increasing at a dramatic pace. We will continue to take actions necessary to maintain high service levels to our customers and our overall industry leadership position.”

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