Joy Global Inc (JOY): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

Summary:

Joy Global missed the earnings estimate in the fiscal first quarter as reduction in demand continued to pose challenges for mining equipment manufactures. Though the global mining outlook is promising, a supply glut of commodities in the global market is putting downward pressure on prices and lowering the demand for mining equipment. The company's decision to move its production capability to high-growth areas is appreciable but the consolidation in the mining industry changes the equipment preference of customers. However, global steel production is expected to grow by 3.3% in 2014 and a sudden rise in natural gas prices in the U.S. could increase mining operations and act as a catalyst for the company. Considering the risks and the rewards, we maintain a Neutral recommendation on the stock.

Overview:

Joy Global Inc., headquartered in Milwaukee, WI., manufactures surface and underground mining equipment for extraction of coal, copper, iron ore, oil sands, gold and other mineral resources. The company also offers a wide range of value-added after-market services aimed to enhance reliability and optimize the work-life of machineries. Joy Global places the highest value on customer support and essentially projects itself as a one-stop shop for original equipment, replacement parts and services. It has equipment manufacturing or sales and services facilities in more than 20 countries including the U.S., Canada, Brazil, Chile, South Africa, England, Poland, Russia, India and China. In fiscal 2013, the company derived 60.9% of its total revenues from international operations.

Joy Global now reports results in two segments: Underground Mining Machinery (UMM) and Surface Mining Equipment (SME). Beginning 2010, Joy Global combined the operations of its Continental Crushing and Conveying (C&C) segment into its Underground Mining Machinery and Surface Mining Equipment segments.

Source: Company

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