Joy Global posts higher first quarter profits
Despite slower global economic growth that has tempered demand for commodities such as iron ore and coal, Joy Global posted higher first-quarter profit, helped by stronger margins, and raised its 2012 forecast.
Milwaukee, WI-based Joy Global, known for its giant shovels and draglines, said it now expects 2012 earnings of $7.40 to $7.80 a share, up from its prior outlook of $7.00 to $7.40 a share. It expects to gain from its investment in China’s International Mining Machinery Holdings Ltd (IMM).
It also raised its 2012 sales outlook to between $5.6 billion and $5.8 billion from between $5.3 billion to $5.5 billion.
First-quarter net income was $142.4 million, or $1.33 a share, compared with $102.2 million, or 96 cents a share, a year ago. Net sales rose 31 percent to $1.14 billion.
Slower global economic growth in recent months has tempered demand for iron ore, coal, copper and other commodities. However, Joy Global said in December that it expects commodity markets to improve as the year progresses, driven by the rebuilding of depleted commodity inventories in developing countries, Reuters reported.
Last year, the company expanded its business with a $1.1 billion acquisition of Rowan Cos.' (RDC) LeTourneau manufacturing operations, giving it exposure to oil- and gas-drilling equipment, and also acquired International Mining Machinery to obtain access to smaller mine operators that typically do business with Chinese manufacturers.
Sales in the underground mining equipment business increased 25 percent. Sales were up 18 percent at the company’s smaller surface mining segment.