Bucyrus International Inc.

Bucyrus International (BUCY) surprised on estimates for the second quarter in a row in July. Analysts forecast 10.6% year over year earnings growth in 2009 despite the global recession. BUCY isn't very expensive, trading at just 10.8x forward earnings.

Company Description

Bucyrus International is a manufacturer of high productivity mining equipment for the surface and underground mining industries.

The company has 2 divisions: surface mining and underground mining. Surface mining equipment is used for mining coal, copper, iron ore, and in the oil sands. Underground mining equipment is used for coal mining and mining minerals such as potash. The company also provides aftermarket services for its machines.

Bucyrus Surprised by 30.12% in the Second Quarter

On July 23, Bucyrus International reported second-quarter results which easily beat the Zacks Consensus Estimate by 25 cents. Earnings per share were $1.08 compared to the Zacks Consensus of 83 cents.

Sales rose 16.7% year over year to $724 million from $621 million in the year ago period. Both segments saw sales increases. Surface mining grew 8.1% year over year while Underground mining gained 16.7%. The increase in the Underground mining segment was mainly due to moderate increases in the longwall, room and pillar and belt systems product lines.

The aftermarket services segment also saw growth compared to the second quarter of 2008.

The company is feeling the recession however. New orders for both segments declined in most markets in the second quarter compared with the year ago period due to the current economic conditions.

Zacks Consensus Estimates Rise

Given the big beat in the second quarter, covering analysts moved to raise estimates for the third quarter and the full year.

Third quarter Zacks Consensus Estimates climbed 5 cents to 85 cents in the last 60 days.

Full-year Zacks Consensus Estimates rose 21 cents to $3.43 in the last 2 months with 1 analyst also raising estimates in just the last week.

Bucyrus is scheduled to report third quarter earnings on Oct 15.

Value Fundamentals

Bucyrus is a Zacks #1 Rank (strong buy) stock. It is trading with a price-to-book of 2.44. The company has a stellar 5-year average return on equity (ROE) of 23.30%.

As an added bonus, the company pays a dividend with a current yield of 0.30%.

Read the full analyst report on BUCY