Joy Global posts bigger-than-expected loss as sales drop 25%
Mining equipment maker Joy Global (NYSE:JOY) logged Thursday a wider-than-expected quarterly loss as sales fell by 25%.
The Wisconsin-based company, which gets more than half of its revenue from coal miners, reported a net loss of $40.2 million, or 41 cents per share, in the first quarter ended Jan. 29, compared with a profit of $30.5 million, or 31 cents per share, a year earlier.
Despite the gloomy results, Joy declared a quarterly dividend of $0.01 per share to be paid on April 4, 2016 to shareholders of record on March 18, 2016.
Shares in the equipment and services provided soared Thursday, trading almost 16% higher in New York to $15.44 at 10:07 am ET. In the last year, however, the stock has fallen almost 65%.
The giant shovels, conveyor belts and jumbo drills manufacturer has taken steps in recent quarters to cut costs amid weak demand, particularly from U.S. coal miners.
"Our customers are taking unprecedented actions on their equipment fleets to conserve cash as commodity prices have weakened," chief executive Ted Doheny said in a statement. "This has adversely impacted our incoming order rate, particularly in the U.S. coal and copper markets."
The company said it is now targeting more than $100 million in cost reductions for the year, up from $85 million previously set as goal.
Bookings of underground mining equipment fell 3%, from $407 million a year ago to $281 million, and surface mining equipment sales fell 8% from $311 million to $286 million. Service bookings are down 18% and OEM bookings are down 33%. Backlog at the end of the quarter totalled $897 million, up from $873 million at the beginning of the year.