Joy Global Inc. (JOY), the largest maker of underground mining equipment, cut its full-year profit and sales forecasts and said it sees no immediate recovery in orders as commodity producers reduce spending amid surplus supply.
Net income will be $5.60 to $5.80 a share on revenue of $4.9 billion to $5 billion in the year through October, the Milwaukee-based company said today in a statement. That’s lower than its February projection for per-share profit of $5.75 to $6.35 on sales of $4.9 billion to $5.2 billion.
Joy posted second-quarter earnings excluding restructuring costs of $1.73 a share, beating the $1.56 average of 19 analysts’ estimates compiled by Bloomberg.
The company’s customers have cut capital spending by 40 percent to 50 percent in response to lower commodity prices, Joy said. Sales of new equipment slumped 33 percent in the second quarter, driven by weakness in the U.S., where coal producers have struggled to compete as some power utilities switch to cheaper natural gas.
“Encouraging signs in many areas of the economy have not yet translated to the industrial sector, which is the primary source of commodity demand,” Chief Executive Officer Mike Sutherlin said in the statement. “We expect customers to continue to deploy capex for mining equipment on a selective basis.”
Joy rose 1 percent to $55.61 at the close in New York. The shares have declined 13 percent this year.
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