Joy Global misses expectations on weak mining equipment sales
Shares in heavy equipment maker Joy Global (NYSE:JOY) were slightly down Thursday morning after the company, recently acquired by Japanese rival Komatsu (TYO: 6301), reported a fiscal third-quarter profit of $128,000, or less than 1 cent per share.
The Wisconsin-based company, the largest independent manufacturer of underground-mining equipment, reported adjusted earning for one-time gains and costs of 10 cents per share, less than the 12 cents expected by Wall Street analysts.
Joy Global expects market conditions to remain weak through 2017.
Chief executive Ted Doheny said market conditions and the company's incoming order rate remain extremely challenged. Total bookings fell 17%, with service orders down 12% compared with the prior year quarter, while original equipment orders dropped by 46%.
Joy, which gets more than half of its revenue from coal miners, warned that volatility in pricing will likely remain, and market conditions are expected to remain weak through 2017.
The company also said the deal with Komatsu is expected to close by mid-2017. After that, two major firms — Caterpillar (NYSE:CAT) and the Japanese giant — will dominate the beleaguered global mining equipment market.
Joy Global’s stock was down 0.22% to $27.22 at 9:54 am ET, but it has more than double since the beginning of the year.