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In a statement, president and chief executive officer, Mike Sutherlin said, "I am extremely pleased with our fourth quarter results. Order rates continued to be strong, indicating our customers' commitment to the fundamentals for the mining industry. We did an excellent job of translating those orders into record revenues at margins that are at the top of our target range."
Fourth Quarter Results
The Milwaukee, Wisconsin-based mining solutions provider posted net income of $118.04 million or $1.11 per share for the fourth quarter, higher than $69.64 million or $0.64 per share in the prior-year quarter.
On average, sixteen analysts polled by First Call/Thomson Financial expected earnings of $1.08 per share. Analysts' estimates typically exclude special items.
Results for the latest quarter were negatively impacted by tax adjustments of $19 million or $0.12 per share, while the prior-year quarter results were negatively impacted by $18 million or $0.16 per share of tax adjustments.
Net sales for the quarter climbed 40% to $1.03 billion from $0.74 billion in the same quarter last year, beating eleven Wall Street analysts' consensus estimate of $1.01 billion, with estimates in the range of $0.98 billion to $1.07 billion.
Among Joy Global's rivals, South Milwaukee, Wisconsin-based Bucyrus International Inc. (BUCY | Quote | Chart | News | PowerRating) in October reported a substantial increase in third-quarter profit, as total sales increased 29% on higher surface mining sales from DBT GmbH, acquired last year. It reported a more than two-fold increase in net income to $64.17 million or $0.85 per share.
Segmental Details
Geographically, Joy Global's domestic sales contributed $514.72 million, while international sales totaled $516.99 million.
On a product stream basis, aftermarket revenues totaled $556.04 million, while original equipment revenues were $475.66 million.
On an operational basis, the company's underground mining machinery generated net sales of $527.07 million, up from $384.27 million in the prior-year quarter, while surface mining equipment net sales increased to $411.84 million from $351.64 million in the year-ago quarter. Net sales for crushing and conveying totaled $118.70 million.
Other Metrics
Net income for the fourth quarter included provision for income taxes of $67 million and an effective tax rate of 36.2%, compared to a provision for income taxes of $73 million and an effective tax rate of 51.3% in the year-ago quarter.
Orders bookings for the quarter jumped 48% to $1.4 billion from last year on a combination of continued growth in the international markets and the favorable conditions in the U.S. underground coal market.
Underground mining equipment orders at Joy increased 12% to $464 million led by growth in the U.S. underground coal market, Eurasia and South Africa. Original equipment orders at Joy increased 13%, while aftermarket orders grew 12%.
Surface equipment orders at P&H increased 23% to $683 million from the year-ago quarter. P&H's original equipment orders were 47% higher than last year, while aftermarket orders were down from the prior period due primarily to comparisons with the timing of a major overhaul and shovel relocations in 2007.
Operating income for the quarter increased 30% to $192.16 million or 19% of sales, from $147.45 million or 20% of sales, in the comparable quarter a year ago.
Operating margin decline reflected the weighted average effect of Continental's relatively lower margins as well as year-end inventory revaluation which was offset by increased steel costs.
Acquisitions
During the third quarter, Joy Global's wholly-owned subsidiary China Mining Machinery, agreed to acquire 100% of the outstanding shares of Wuxi Shengda, a Chinese manufacturer of longwall shearing machines, for $22.0 million, excluding closing costs.
In the second quarter, the company completed the acquisition of conveyor equipment maker Continental Global Inc. for $254 million, from which the company expected to add about $260 million - $280 million in partial-year revenue during fiscal 2008, with operating margins of about 7% and an accretive impact on earnings of $0.05 - $0.10 per share, both after purchase accounting charges.
Full-Year Highlights
For fiscal 2008, net income increased to $374.28 million or $3.48 per share from $279.78 million or $2.54 per share posted in fiscal 2007. Income from continuing operations for the latest period was $373.14 million or $3.47 per share.
Including tax adjustments, earnings per share rose to $3.45 from $ 2.51 in the year-ago period. Analysts expected the company to report earnings of $3.42 per share for the full-year 2008.
Net sales for the full-year 2008 surged 34% to $3.42 billion from $2.55 billion posted last year. The Street was looking for fiscal 2008 revenues of 3.40 billion.
Outlook
Looking ahead to fiscal 2009, the company expects results to be impacted by low equipment orders and the negative impact of currency translation on international sales. Revenues are expected to be reduced by $300 million and operating earnings by as much as $60 million if the exchange rates remained at their current levels.
Joy Global currently expects full-year 2009 earnings in a range of $3.60 to $4.00 per share. Analysts expect the company to report earnings of $4.20 per share for fiscal 2009.
The company also anticipates reporting revenues between $3.5 billion and $3.7 billion for the full-year 2009. Wall Street analysts currently estimate fiscal 2009 revenues of $3.98 billion.
Stock Quote
In Wednesday's regular trading session, JOYG is trading at $25.25, up $2.59 or 11.43% on a volume of 36,300 shares. In the past 52-week period, the stock has been trading in a broad range of $14.30 to $90.00.
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