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Joy Global (JOY) Misses Q3 Earnings & Revenue Estimates
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Joy Global Inc. reported adjusted earnings of 10 cents per share in the third quarter of fiscal 2016, lagging the Zacks Consensus Estimate of 12 cents by 16.7%. In the year-ago quarter, the company had reported earnings of 59 cents.
On a GAAP basis, the company reported breakeven results for the quarter, compared with earnings of 52 cents a year ago. The difference between the GAAP and operating figures was due to restructuring charges of 25 cents and merger costs of 3 cents, which was partially offset by a benefit of 11 cents from discrete tax adjustments, a 6 cents tax benefit from restructuring charges and a 1 cent tax benefit on merger costs.
Total Revenue
Joy Global reported net sales of $586.6 million in the third quarter of fiscal 2016, decreasing 26% from the year-ago figure of $792.2 million and lagging the Zacks Consensus Estimate by 4.2%.
The year-over-year decline in revenue was due to lower contributions from the Underground Mining Machinery and Surface Mining Equipment segments.
Total bookings at Joy Global during the third quarter of fiscal 2016 were $527 million, down 17% from $635 million a year ago. A 21% decline in orders for Joy Global’s legacy underground business and a 24% reduction in bookings from the surface mining businesses led to the year-over-year lower bookings.
Joy Global’s total backlog at the end of the fiscal third quarter was $916 million, up 4.9% from $873 million at the beginning of the fiscal year.
Product development, selling and administrative expenses in the reported quarter were $114.4 million, down 11.1% year over year.
Net interest expense in the quarter was $11.1 million, down from $13.7 million in the third quarter of fiscal 2015.
During the quarter, Joy Global inked a definite agreement with Japanese mining and construction equipment maker and seller, Komatsu Ltd., worth $2.9 billion. Per the agreement, Joy Global will be acquired by Komatsu Ltd and post acquisition, the former will act as a consolidated subsidiary of the latter. The transaction is expected to close by mid 2017, subject to regulatory approvals.
Financial Condition
Cash and cash equivalents as of Jul 29, 2016 were $182.8 million, compared with $102.9 million as of Oct 30, 2015.
Cash from operating activities during third-quarter fiscal 2016 was $26.1 million, down substantially from $115.9 million in the prior-year quarter.
Capital expenditure was $11 million, compared with $18 million in the prior year.
Guidance
Joy Global has not provided a financial guidance due to its pending merger with Komatsu America.
Peer Releases
Caterpillar Inc.’s (CAT - Free Report) operating earnings of $1.09 in second-quarter 2016 beat the Zacks Consensus Estimate of 96 cents by 13.5%.
Astec Industries, Inc.’s (ASTE - Free Report) operating earnings of 79 cents in second-quarter 2016 surpassed the Zacks Consensus Estimate of 75 cents by 5.3%.
Terex Corporation (TEX - Free Report) operating earnings of 64 cents per share in second-quarter 2016 outpaced the Zacks Consensus Estimate of 53 cents by 20.8%.
Our View
Joy Global failed to beat both top-line and bottom-line estimates in the reported quarter owing to tough market conditions that led to a substantial decline in new bookings.
Although a warmer-than-normal weather across the U.S. could boost coal demand from utilities, the regulatory pressure on coal usage would result in an almost 21% year-over-year drop in the fossil fuel’s usage in 2016. This will definitely hurt Joy Global as nearly 59% of its top line is derived from coal miners.
Amid such difficult market conditions, Joy Global plans to continue with its restructuring activities to align the company's workforce and overall cost structure with the current and future levels of demand.
Joy Global currently has a Zacks Rank #3 (Hold).
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Joy Global (JOY) Misses Q3 Earnings & Revenue Estimates
Joy Global Inc. reported adjusted earnings of 10 cents per share in the third quarter of fiscal 2016, lagging the Zacks Consensus Estimate of 12 cents by 16.7%. In the year-ago quarter, the company had reported earnings of 59 cents.
On a GAAP basis, the company reported breakeven results for the quarter, compared with earnings of 52 cents a year ago. The difference between the GAAP and operating figures was due to restructuring charges of 25 cents and merger costs of 3 cents, which was partially offset by a benefit of 11 cents from discrete tax adjustments, a 6 cents tax benefit from restructuring charges and a 1 cent tax benefit on merger costs.
Total Revenue
Joy Global reported net sales of $586.6 million in the third quarter of fiscal 2016, decreasing 26% from the year-ago figure of $792.2 million and lagging the Zacks Consensus Estimate by 4.2%.
The year-over-year decline in revenue was due to lower contributions from the Underground Mining Machinery and Surface Mining Equipment segments.
JOY GLOBAL INC Price, Consensus and EPS Surprise
JOY GLOBAL INC Price, Consensus and EPS Surprise | JOY GLOBAL INC Quote
Highlights of the Release
Total bookings at Joy Global during the third quarter of fiscal 2016 were $527 million, down 17% from $635 million a year ago. A 21% decline in orders for Joy Global’s legacy underground business and a 24% reduction in bookings from the surface mining businesses led to the year-over-year lower bookings.
Joy Global’s total backlog at the end of the fiscal third quarter was $916 million, up 4.9% from $873 million at the beginning of the fiscal year.
Product development, selling and administrative expenses in the reported quarter were $114.4 million, down 11.1% year over year.
Net interest expense in the quarter was $11.1 million, down from $13.7 million in the third quarter of fiscal 2015.
During the quarter, Joy Global inked a definite agreement with Japanese mining and construction equipment maker and seller, Komatsu Ltd., worth $2.9 billion. Per the agreement, Joy Global will be acquired by Komatsu Ltd and post acquisition, the former will act as a consolidated subsidiary of the latter. The transaction is expected to close by mid 2017, subject to regulatory approvals.
Financial Condition
Cash and cash equivalents as of Jul 29, 2016 were $182.8 million, compared with $102.9 million as of Oct 30, 2015.
Cash from operating activities during third-quarter fiscal 2016 was $26.1 million, down substantially from $115.9 million in the prior-year quarter.
Capital expenditure was $11 million, compared with $18 million in the prior year.
Guidance
Joy Global has not provided a financial guidance due to its pending merger with Komatsu America.
Peer Releases
Caterpillar Inc.’s (CAT - Free Report) operating earnings of $1.09 in second-quarter 2016 beat the Zacks Consensus Estimate of 96 cents by 13.5%.
Astec Industries, Inc.’s (ASTE - Free Report) operating earnings of 79 cents in second-quarter 2016 surpassed the Zacks Consensus Estimate of 75 cents by 5.3%.
Terex Corporation (TEX - Free Report) operating earnings of 64 cents per share in second-quarter 2016 outpaced the Zacks Consensus Estimate of 53 cents by 20.8%.
Our View
Joy Global failed to beat both top-line and bottom-line estimates in the reported quarter owing to tough market conditions that led to a substantial decline in new bookings.
Although a warmer-than-normal weather across the U.S. could boost coal demand from utilities, the regulatory pressure on coal usage would result in an almost 21% year-over-year drop in the fossil fuel’s usage in 2016. This will definitely hurt Joy Global as nearly 59% of its top line is derived from coal miners.
Amid such difficult market conditions, Joy Global plans to continue with its restructuring activities to align the company's workforce and overall cost structure with the current and future levels of demand.
Joy Global currently has a Zacks Rank #3 (Hold).
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>