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Joy Global reports third quarter fiscal year operating results

Published by
World Coal,

Joy Global Inc reports its third quarter fiscal 2015 results ending 31 August – reporting a 31% fall in consolidated bookings and a 10% decline in net sales.

"Our financial results for the third quarter reflect an end market environment that is one of the most challenging seen in decades," said Ted Doheny, President and CEO. "The further step down in commodity prices resulted in projects getting delayed and a lock down on cash from our customers which impacted our service business. We are accelerating our facility optimization plans and taking additional cost reduction actions to align with lower market demand.

Consolidated bookings totalled US$635 million – a decrease of 31% from a year ago. When adjusting for foreign currency exchange, orders were down 26% compared to the third quarter of last year, with original equipment orders down 65% and service orders down 9%. Bookings for underground mining machinery decreased 26% and bookings for opencast mining equipment decreased 33% compared to the same quarter on 2014.

Net sales came in at US$792 million, declining 10% from the same time last year. Original equipment sales decreased 22% and service sales decreased 4%. Current quarter net sales were reduced by US$50 million from the impact of foreign currency exchange movements compared with the same period last year.

Net sales for underground mining machinery decreased 4% in comparison to the third quarter of last year and reduced by US$39 million from the impact of foreign currency exchange.

Net sales for opencast mining equipment decreased 17% in comparison to the third quarter of last year and were reduced by US$11 million from the impact of foreign currency exchange.

Operating income for the third quarter of the fiscal 2015 totalled US$73 million, compared to US$119 million in the third quarter of fiscal 2014. The third quarter of 2015 included an aggregate negative impact of US$13.6 million from restructuring charges, a non-cash pension settlement charge, excess purchase accounting and acquisition costs compared to a US$14.1 million negative impact in 2014 for restructuring charges and pension related items. The US$46 million y/y decrease in adjusted operating income in the quarter is reported to be a result of lower sales volumes, unfavourable product mix and increased bad debt and legal expenses.

Fully diluted earnings per share for the third quarter totalled US$0.46, compared to US$0.71 in the third quarter of fiscal 2014.

"We are continuing to take proactive steps to better position the company for the eventual market recovery," said Doheny. “Our focus on cost control and capital management will help mitigate the market softness currently impacting the business. We've exceeded our year-to-date cost savings target, and we will continue to drive cost out of the business over the next several quarters.

Doheny continued: "The ongoing challenges in commodity markets along with slowing global economic growth have weighed on our customers' financial position and our incoming order rates. We now expect fiscal 2015 revenues and adjusted earnings per fully diluted share to be approximately US$3.1 billion and approximately US$1.80, respectively … Our focus remains on prudently managing the business through the current market downturn as well as providing the world-class service and technical expertise that our customers expect and need. We will continue to invest strategically in areas that provide value to our customers and returns to our shareholders."

Edited from press release by Harleigh Hobbs

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