ANALYST: Joy Global hurt by decline in value of commodity prices: Wall Street Opinions are Mixed

Joy Global Inc.

reported first quarter earnings on Thursday that were lower than analyst expectations. EPS fell 52 percent year over year to $.24 and their revenue was $703.9 million which fell short of the consensus estimate of $749.4 million.

, "Our first-quarter results highlight the continued challenges we face in our end markets as we navigate the extended trough of this cycle," President and Chief Executive Ted Doheny said in a statement. "Key commodity prices took another step down this quarter, which has created additional challenges for our customers and slowed our incoming order rates." Currently Joy Global Inc. is trading at $38.90, down 2.60 percent. Several Wall Street firms gave their opinions of Joy Global Inc.: 1. BB&T Capital markets: Hold with no available price target. "Revenues came up short of expectations on weak Surface volumes, while margins were also disappointing across both operating segments. Management lowered fiscal 2015 guidance, calling for sales of $3.3B-$3.6B (was $3.6B-$3.8B) and EPS of $2.50-$3.00 (was $3.10-$3.50), as they envision further challenges on both the OE and service side. Orders in the period also took a step back, and aggregate book-to-bill remains below the 1.0x mark. Altogether a weak operating quarter coupled with an uninspiring outlook for 2015. 2. BMO Capital Markets: Outperform with a $48 price target. "Trends in its original equipment (OE) business remain weak as capex cuts at producers look to be even worse than the double digit declines expected at the beginning of the year owing to the further deterioration in end markets... It seems even the company was a little surprised by incremental end-market weakness as the sustained decline in commodity prices (particularly copper and natural gas) quickly strained customer cash flows leading to a delayed maintenance/rebuild schedule. Production was also cut in some product and geographic end markets which is a shorter-term negative for service revenues but should ultimately help the long-term supply/demand equation." 3. William Blair: Outperform with a $55 price target. " The macroeconomic and commodity price environment has worsened in recent months. Management noted that the company has seen slowing in the bookings, and the commodity production declines are affecting the service bookings. Although production declines will help rebalance supply and demand fundamentals, they will also pressure the company's near-term service booking activity. As the market weakens further, the company is accelerating its facility optimization plan and taking additional cost-reduction actions to those previously announced...Mine productivity improvements and cost reductions are the focus of the industry as further mine and asset consolidation is expected to take place in 2015." 4. RBC Capital Markets: Sector Perform with a $46 price target. "Although we view JOY as a high-quality operator with an attractive service-oriented business model that should generate significant cash, we expect current industry dynamics in the mining landscape (high commodity supplies, low prices, enhanced producer capital discipline) to continue to weigh on results and investor sentiment." 5. Deutsche Bank: Hold with a $45 price target. "Softer commodity prices across copper and natural gas led to JOY missing 1Q earnings estimates and revising guidance downward. From an end market perspective, visibility is limited on the OE side and this trend will likely continue through 2015, while the outlook is mixed for service and growth weighted towards 2H. That said, mgmt is executing strongly on its cost savings program and likely has additional levers to pull if the market softens further."