Joy Profit Forecast Misses Estimates Amid Mining Slump
Joy Global Inc. (JOY), the world’s largest maker of underground mining equipment, forecast lower-than-expected earnings for fiscal 2014 as customers continue to restrict spending after a decline in commodity prices.
Profit excluding one-time items will be $3 to $3.50 a share in the coming year through October, the Milwaukee-based company said today in a statement. The average of 22 analysts’ estimates compiled by Bloomberg is for $3.67. Joy fell 4.4 percent to $53.75 at 8:07 a.m. before the start of regular trading in New York.
Mining companies around the world have cut billions of dollars of capital expenditure amid surplus production of metals and coal. Spending won’t recover until commodity prices move toward “incentive levels” for producers, Joy said.
“Although we believe our markets overall will begin to improve in 2014, the timing is difficult to predict,” Ted Doheny, executive vice president and incoming chief executive officer, said in the statement. “Until a sustained demand catalyst emerges, we expect our customers will continue to be cautious and selective in deploying capex.”
Sales for the 2014 fiscal year will drop to $3.6 billion to $3.8 billion, from $5.01 billion, Joy said.
The company’s net income in the quarter ended Oct. 25 dropped 87 percent to $26.8 million, or 25 cents a share, from $212.4 million, or $1.99, a year earlier. Adjusted per-share profit was 1 cent below the $1.12 average of 21 estimates.
Joy said it will take “additional restructuring actions” in 2014 as it moves manufacturing capacity “eastward” to be nearer the source of potential demand growth. The cost of those changes will be about $15 million for the year, it said.
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