Lower demand from China and a coal sector that is struggling in the U.S. have led to Joy Global Inc. reporting a lower forecast than expected for the this fiscal year.
The Milwaukee-based mining equipment manufacturer reported that third-quarter bookings were $1.1 billion, compared with $1.4 billion for the same period last year, a decrease of 25 percent. Joy Global is the parent company of West Milwaukee-based P&H Mining Equipment Inc.
Net income attributable to Joy Global was $193.5 million, or $1.81 per share, compared with $173.1 million, or $1.62, in the year-ago period. Net sales for the quarter ended July 27 increased 22 percent to $1.4 billion compared with the same period last year.
"Our results this quarter continue to show strong execution, but against a market backdrop of adjustment to lower demand for U.S. coal and continued slowing of the Chinese economy," said Mike Sutherlin, Joy Global’s president and CEO. "The original equipment order rate is impacted by a project pipeline that has slowed but still has several new projects that should reach equipment selection in the near term. Reduced aftermarket orders in the U.S. have been mostly offset by increased orders from international markets."
The company is seeing evidence that the U.S. and China markets have bottomed, but expects the recovery to be sluggish, Sutherlin said.
"We expect to experience greater lumpiness in original equipment bookings going forward," Sutherlin said. "To put this in context, we did not have any major contracts in our second or third quarter bookings, but continue to work several projects that are expected to become bookings in the next few months."
Joy Global has lowered its revenue forecast for fiscal 2012 to between $5.45 billion and $5.55 billion, about $100 million less than its previous guidance, on full-year earnings per share of between $7.05 and $7.20 before restructuring charges. The company expects to incur $20 million in restructuring charges in the fiscal fourth quarter, reducing earnings per share by 13 cents, Sutherlin said.