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Joy Global (JOY): Will the Stock Disappoint in Q2 Earnings?
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Joy Global Inc. , a leading manufacturer of surface and mining equipment, is scheduled to report fiscal second-quarter 2016 results on Jun 2, before the market opens. Last quarter, the company reported a negative earnings surprise of 130.00%. Let’s see how things are shaping up for this quarter.
Factors to Consider
With economic weakness forcing miners to restrict project development and expansion, Joy Global is witnessing a slowdown in demand. The company expects 2016 coal production to decrease by nearly 150 million tons from the 2015 levels. As a result, demand for mining equipment is expected to be soft in 2016.
Given these factors, management expects year-over-year declines in both earnings and revenues in fiscal 2016.
However, Joy Global expects to benefit from cost-saving initiatives, monetization of non-core assets and its decision to optimize global manufacturing & services capabilities.
Surprise History
The above chart indicates that Joy Global was able to generate positive earnings surprises in two out of the last four quarters, with an average negative surprise of 32.59%.
Earnings Whispers
Our proven model does not conclusively show that Joy Global will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -33.33%. This is because the Most Accurate estimate stands at a loss of 4 cents while the Zacks Consensus Estimate is a loss of 3 cents.
Zacks Rank: Though Joy Global’s Zacks Rank #3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
Astec Industries, Inc.’s (ASTE - Free Report) operating earnings of 77 cents in first-quarter 2016 surpassed the Zacks Consensus Estimate of 73 cents by 5.5%.
Caterpillar Inc.’s (CAT - Free Report) operating earnings in first-quarter 2016 came in line with the Zacks Consensus Estimate of 67 cents.
Terex Corporation (TEX - Free Report) reported an operating loss of 5 cents per share in first-quarter 2016, wider than the Zacks Consensus Estimate of a loss of 2 cents by 150%.
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Joy Global (JOY): Will the Stock Disappoint in Q2 Earnings?
Joy Global Inc. , a leading manufacturer of surface and mining equipment, is scheduled to report fiscal second-quarter 2016 results on Jun 2, before the market opens. Last quarter, the company reported a negative earnings surprise of 130.00%. Let’s see how things are shaping up for this quarter.
Factors to Consider
With economic weakness forcing miners to restrict project development and expansion, Joy Global is witnessing a slowdown in demand. The company expects 2016 coal production to decrease by nearly 150 million tons from the 2015 levels. As a result, demand for mining equipment is expected to be soft in 2016.
Given these factors, management expects year-over-year declines in both earnings and revenues in fiscal 2016.
However, Joy Global expects to benefit from cost-saving initiatives, monetization of non-core assets and its decision to optimize global manufacturing & services capabilities.
Surprise History
The above chart indicates that Joy Global was able to generate positive earnings surprises in two out of the last four quarters, with an average negative surprise of 32.59%.
Earnings Whispers
Our proven model does not conclusively show that Joy Global will beat estimates this quarter. That is because a stock needs to have both a positive Earnings ESPand a Zacks Rank #1 (Strong Buy), #2 (Buy) or #3 (Hold) for this to happen. But that is not the case here, as you will see below.
Zacks ESP: The Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is -33.33%. This is because the Most Accurate estimate stands at a loss of 4 cents while the Zacks Consensus Estimate is a loss of 3 cents.
Zacks Rank: Though Joy Global’s Zacks Rank #3 increases the predictive power of ESP, the company’s negative ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Ranks #4 or #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Peer Releases
Astec Industries, Inc.’s (ASTE - Free Report) operating earnings of 77 cents in first-quarter 2016 surpassed the Zacks Consensus Estimate of 73 cents by 5.5%.
Caterpillar Inc.’s (CAT - Free Report) operating earnings in first-quarter 2016 came in line with the Zacks Consensus Estimate of 67 cents.
Terex Corporation (TEX - Free Report) reported an operating loss of 5 cents per share in first-quarter 2016, wider than the Zacks Consensus Estimate of a loss of 2 cents by 150%.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>