Mining-equipment manufacturer Joy Global Inc.'s profit rose 18% in the fourth quarter as mining activity increased during the three-month period, the company said Dec. 15.
Net income in the quarter was $146 million, or $1.39 a share, compared with $124 million, or $1.20 per share, in the year-earlier period. Quarterly bookings increased 48% to $1 billion, and net sales rose 9% to $1 billion.
The company's surface-mining business benefited from increased orders for electric mining shovels from North American copper and iron-ore customers and Russian coal customers.
Underground original-equipment orders were up $121 million, led by increased orders in the United States and Australia, the company said.
A weaker dollar in the quarter also helped boost orders, Joy Global said.
For the full year, net income was $461 million, or $4.40 a share, compared with $455 million, or $4.41 a share in 2009. Bookings were $3.9 billion, an increase of 39% from the previous year. The increase in bookings was led by an underground mining-equipment order from China, strong growth in North and South American copper and coal markets and aftermarket growth in most regions, the company said. Net sales were $3.5 billion compared with $3.6 billion in fiscal 2009.
President and CEO Mike Sutherlin credited the increase in part to efficiency improvements.
"The improving bookings rate supports our view that our mining customers will continue to increase their capital expenditure plans in response to strong industry fundamentals," he said. "We continue to ramp up our production to meet this expected growth in demand and, as a result, this is the first quarter in which both orders and shipments have exceeded the $1 billion threshold for us. We also continue to improve the efficiency of our operations, and we were able to deliver operating margins at record levels for both the quarter and the year. Our operational excellence efforts are impacting asset utilization as well as profitability, and we were able to reduce our trade working capital as we increased shipments during the year. As a result, we finished the year with increasing order rates and improving operational and financial results, and this will provide momentum into 2011."
Looking ahead, Joy Global expects strong demand in emerging markets for commodities will by mining companies are realizing strong demand and prices will result in increased orders. The company projects revenues for 2011 to be between $3.9 and $4.1 billion and earnings per share to be between $5 and $5.30.
The company plans to increase capital expenditures in anticipation of customer expansion programs. Joy Global is budgeting $150 million in capital expenditure for 2011, with the amount focused on both additional manufacturing capacity in China and on field service center upgrades and additions in most major regions, Sutherlin said.
"We are increasing our production schedules to keep pace with growing customer demand," said Sutherlin. "Based on both market fundamentals and the discussions directly with our customers, we are confident that this is the early stage of another multiyear expansion of the mining industry."
