Joy Global profits jump 34%
Joy Global Inc.'s fiscal first-quarter earnings rose 34%, but the mining-equipment company's sales and profit were lower than expected, partly because of flooding in Australia that disrupted mine operations.
According to a report in The Wall Street Journal, Chief Executive Mike Sutherlin said a 20-25% increase in steel prices will be offset by higher equipment prices.
"We're looking at higher input prices," Mr. Sutherlin said during a conference call Wednesday. "I don't think it's a significant, unmanageable risk though." The Milwaukee -based company's profits and orders for new equipment and service have been improving in recent quarters on rising prices for mined commodities, such as coal, iron ore and copper. Wall Street views Joy Global and rival Bucyrus International Inc. as indicators of capital spending on production capacity in the global mining industry.
Mine operators have been ramping up orders for new equipment and activating machinery and mine expansion projects that were idled in 2008 when commodity prices collapsed.
"We see quite a bit of head room for [capital-spending] growth and mine-expansion growth," Mr. Sutherlin said. "That's what we're planning for. We continue to see a multiyear expansion ahead."