For its fourth quarter ended October 31, the company reported a 48% increase in bookings to $US1.044 billion, versus $705 million in last year’s fourth quarter. Net sales increased 9% to $1.048 billion from $964 million a year ago.
An operating income of $227 million led to a record margin for the quarter of 21.6% of sales, versus $184 million and 19.1% of sales a year ago, and net income rose to $146 million from $124 million.
Joy president and chief executive Mike Sutherlin said the financial results supported the company’s belief that its customers would increase capital expenditure plans along with strong industry fundamentals.
“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,” he said.
“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. We finished the year with increasing order rates and improving operational and financial results, and this will provide momentum into 2011."
Looking at bookings in the fourth quarter, original equipment orders more than doubled while aftermarket requests were up 21%. Underground original equipment orders swelled to $121 million on increased longwall and room-and-pillar equipment orders in the US and Australia.
Surface original equipment orders were also up, by $115 million, with Russian coal and North American copper and iron ore customers ordering electric mining shovels.
Joy’s aftermarket business for the underground sector increased by 16% on higher rebuild demand in the US and South Africa. Surface business aftermarket orders were also up 27% across most regions, but primarily in Canada.
On the sales side, surface equipment was up 10% year-on-year, including a 12% rise in aftermarket sales and 6% increase in original equipment sales.
The OEM cited increased shipments in North America for the aftermarket rise while an improvement in original equipment sales was primarily due to increased alliance product sales.
Going underground, equipment sales were up 8%, with 21% in aftermarket from increased parts sales and machine rebuilds across all of Joy’s regions. Original equipment sales fell 3% on decreased longwall equipment shipments in South Africa, though that was partially offset by a rise in longwall and room-and-pillar shipments to China.
Looking ahead, Joy Global said end-use demand for the commodities it served continued to improve and, as such, mining companies were expanding their capital budgets to meet the higher anticipated demand.
"We are increasing our production schedules to keep pace with growing customer demand," Sutherlin said.
"Based on both market fundamentals and the discussions directly with our customers, we are confident that this is the early stage of another multi-year expansion of the mining industry.”
He noted that Joy was increasing its own capital spending to ensure it would have the machines available for customers’ expansion programs, and was seeking to get that capacity in as early as possible.
The OEM has budgeted $150 million in capital expenditure for 2011, and will focus the spending on both additional manufacturing capacity in China and field service center upgrades and additions in most of its major regions of operation.
"We expect fiscal 2011 to be a year of increasing order rates and improving financial results,” Sutherlin said.
“Increased production schedules should translate into top line growth. We expect our revenues for fiscal 2011 to be between $3.9 and $4.1 billion, and our earnings per fully diluted share to be between $5 and $5.30.”
