EmailJoy Global (JOY $54.85 -4.02) reported second quarter earnings of $2.04 per share, excluding non-recurring items, $0.08 better than the Capital IQ Consensus of $1.96, while revenues rose 45.1% year/year to $1.54 billion versus the $1.43 billion consensus. The company lowered guidance for fiscal year 2012 with EPS of $7.15-7.45 from prior guidance of $7.40-7.80, excluding non-recurring items, versus the $7.64 consensus and the company lowered fiscal year 2012 revenues to $5.5-5.7 billion from prior guidance of $5.6-5.8 billion versus the $5.7 billion Capital IQ Consensus Estimate.
"Our efforts on cycle time reduction allowed us to increase shipments this quarter in our core Joy underground and P&H surface businesses by 24 percent over last year, and our focus on operating leverage delivered 24 percent operating margins in these core businesses. We are very pleased with the performance from our acquired LeTourneau and International Mining Machinery businesses, as they collectively delivered operating margins above 20 percent before first-year excess purchase accounting charges. With the U.S. market correcting quickly, and the international markets showing signs of near term slowing, we are turning our focus to trimming costs..."Aftermarket demand flows to shipments in two months, on average. The current softness in the U.S. aftermarket orders is not expected to be completely offset by strength in the international markets, and therefore the aftermarket bookings rate is expected to adversely impact revenues by $100 million for 2012. This will reduce this year's earnings per share by $0.18." Eurozone concerns and tempered growth expectations in China dominate the end markets for mined commodities. The fallout of the sovereign debt problems has slowed growth in Europe, with seven countries seeing little or negative growth. GDP growth in China hit its lowest rate in three years at 8.1 percent in the first quarter and year over year growth in industrial production fell to 9.3 percent in April, from 11.9 percent the prior month, raising concerns of a slowing in the Chinese economy. With inflation in China stabilizing in the range of 3.2 to 3.6 percent, the central government is expected to continue to reduce the required reserve ratio for bank lending after prior reductions led to increased spending in March.
