Net sales were up 6% year-on-year to $US956 million, while net income also rose, from $113 million to $124 million.

The OEM’s operating income was $195 million, or 20% of net sales, versus last year’s result of $134 million, 15% of net sales.

Joy president and chief executive Mike Sutherlin said the results were exceptional and he was pleased with the performance.

"It is also extremely gratifying to see payoff from the efforts that we have invested over the past couple of years, with profitability benefiting from the continued deployment of our operational excellence programs, from improved supply chain management, from strong cost control, and from better pricing finally flowing through backlog into shipments," he said, noting that the third quarter reflected a “balanced performance” extending beyond profitability.

"Our efforts to improve inventory velocity have been slowing the rate of inventory growth [and] we have achieved a substantial reduction in inventory this quarter and expect this momentum to carry forward. These high levels of financial performance and operational efficiency will serve us well going forward."

However, the company noted a reduction in new orders in the third period, which came in at $683 million before cancellations totaling $39 million. That is versus 2008 third-quarter results of $1.5 billion.

Terminated orders were primarily in the underground and Continental Crushing and Conveying divisions and stemmed from customers in northern and central Appalachia.

“New original equipment orders, before cancellations, declined 76 per cent from last year's third quarter, with the declines greatest in the P&H surface equipment business,” Joy noted.

“The largest portion of original equipment orders was for longwall equipment for China, [and] no new shovel orders were booked in the current quarter.”

The company added that the result took into account a $606 million backlog adjustment for surface orders which failed to meet Joy’s revised booking criteria.

New aftermarket orders were down 21% year-on-year before cancellations of $6 million. Surface machine assembly orders declined $39 million in line with the absence of new shovels being secured.

One of the greatest drops was in the North American underground coal market, which sank 22% to $32 million in the third quarter.

Looking ahead, Joy said it expected a “significant difference” in demand levels between the US and seaborne-traded coal markets, and cited 2009 drops of 10-12% in thermal coal demand.

Further reductions are still coming, Joy noted, but any return in the market will be delayed in part by the swollen inventories at the nation’s power plants, which are nearly double their normal size.

The upside is new planned coal-fired plants; the OEM reported that 22 gigawatts of capacity were currently being built or in the permitting phase, and half of that should be online by the end of next year.

“This will be the newest and most efficient capacity on the grid, and will burn an additional 60-70 million tons of coal annually,” the company said.

In other parts of the world, the story is vastly different. Thermal coal imports to China spiked 90% in the year’s first half and for the first time in two decades the country could be a net importer, with 2009 volumes rising to 40 million tons.

“India is also having a significant impact on the seaborne markets for thermal coal, with imports expected to be up 18 per cent to 40 million tons this year and up another 18 per cent to 47 million tons next year.”

Overall, Sutherlin said Joy had been encouraged by the global economic signs it was seeing, but it was moving ahead with caution.

"It is too soon to determine whether this will lead to recovery or is the start of a period of bumping along the bottom,” he said.

“We continue to look to the activities and decisions of our customers as the best indicator of future trends and directions for our business, and they continue to be cautious as well.”

Joy feels “little opportunity” for recovery in the US exists, particularly in thermal product, through next year.

"In the meantime, we expect our new orders to stay about 30 per cent below current shipping levels,” Sutherlin noted.

“If the order rates begin to improve in calendar 2010, they will not translate into shipments until 2011 and therefore we continue to see 2010 as a year of lower revenues. However, we expect to meet our previous 2009 revenue guidance of $3.5-3.6 billion.”