Joy Global, which is the biggest manufacturer of underground mining equipment, dropped to its lowest price in a month after it announced that it anticipates a decline in sales for the rest of the year as demand for large shovels and draglines weakened as a result of a challenging coal market. The company decreased as much as 6.4 percent to $48.07, which is the lowest value since July 25, before it cut losses to trade at $49.33. In 2013, the shares dropped around 20 percent before the start of trading.
Chief Executive Officer Mike Sutherlin said that the current outlook of Joy Global for the fiscal 2014 will not support the annual revenue over $4 billion. This was stated in the third quarter earnings statement of the company. This was below the estimates made by analysts of $4.57 billion for the fiscal year ending October 2014.
Sutherlin said that conditions in the company’s end market were dominated by supply surplus and decreased demand growth for most commodities. He has been the CEO of Joy Global since 2006. He added that the market will continue to face challenges before it starts to improve.
Joy Global said that sales forecast for the fiscal year ending October will be within the range of $4.9 billion to $5 billion. Net income for the fiscal third quarter ended July 26 dropped 5 percent to $182.2 million from $193.6 million in the same period last year. Revenue fell 5 percent to $1.32 billion.
Excluding one-time items, Joy Global got $1.70 per share. Analysts estimated the company’s earnings to be $1.37 per share on revenue of $1.18 billion. The company’s operating margin reduced to 33.3 percent from 34.3 percent.
Joy Global’s bookings dropped due to a weaker commodity market and stronger dollar. Bookings declined 36 percent to $695.4 million from $1.08 billion in the previous year.