For the period ended October 25, the Wisconsin-based company reported earnings of $US26.8 million, down sharply from $212.6 million in the final quarter of 2012.
Revenues were $1.18 billion, a 26% year-on-year drop from $1.59 billion in the comparable quarter.
The OEM noted that its adjusted earnings excluded a $155 million pretax non-cash intangible asset impairment charge tied to its recently-unveiled branding initiative as well as other items.
Still being hit hard by the rough market waters across mining, Joy’s total bookings totaled $1.1 billion, down 19% over last year, and sales totaled $1.2 billion, a 26% drop.
Original equipment orders were down 38% and aftermarket orders fell 3% year-on-year. Sequentially, officials said, its current year fourth-quarter aftermarket and original equipment bookings were actually up 19% and 279%, respectively.
Looking only at underground mining machinery, bookings fell 6% over the same period of last year; original equipment orders saw an 11% decline with drops in all regions except Australia.
Aftermarket orders on the underground side decreased 1%, driven by strong rebuild orders for North America but offset by declines in China and Eurasia.
On the surface side of the business, bookings dropped 32%, with original equipment orders feeling the brunt of the loss with a 62% reduction year-on-year.
Aftermarket bookings decreased 5% during the same period.
Original equipment orders were down in all regions except Eurasia, it said, while aftermarket orders increased in South America and Eurasia but offset by reductions in its other regions.
“This quarter once again demonstrates outstanding execution in a difficult market,” president and chief executive officer Mike Sutherlin said of the results, who added that Joy is very encouraged by the sequential recovery of aftermarket orders.
“This puts us almost back to the levels of a year ago, even though some regions are still lagging.
“It was especially good to see the return of machine rebuilds to the US underground business, which is an important step in the recovery of this market segment.”
Sutherlin acknowledged that the OEM is seeking lead times dropping, thus the historical lumpiness has again returned to its order rates.
“The third and fourth quarter bookings bound a range that we expect to continue in 2014,” he said.
“Although we booked a major longwall project this quarter as expected, there are fewer other projects moving forward which meet today's stringent criteria of operating on the lower half of the global cost curve.”
At this point, he noted that Joy now has a limited time to book projects in time for its to have an positive impact on its 2014, but it does know that there is a “need and opportunity” to reduce its cost base going in to the new year.
“We have made substantial progress in streamlining our businesses and regions, and are now taking the next step of consolidating our surface and underground businesses and products under the Joy Global brand,” Sutherlin said.
“Although the reduced value of the separate brands results in a non-cash charge, this is an important step that will continue to make us more efficient, responsive and competitive.”
Looking ahead, executive vice president and chief executive officer-designee Ted Doheny, who is set to step up to the helm at the company in 2014, called the year just completed “transitional” for its end markets as capacity across the world continues to exceed demand.
“This resulted in most mined commodities remaining in surplus and has led to prices for industrial metals and bulk commodities declining 20 to 40 percent over the last 18 months,” he said.
“Current market conditions have created an environment where higher cost mines are being closed and projects with only the strongest financial returns are being approved. Industry capex in 2013 declined further as falling commodity prices reduced our customers' cash flow and caused the industry to re-evaluate expansion projects.”
The executive said that thermal coal capital expenditures are still under some pressure, but the company feels they are near the bottom. On the met side, capex will probably slow.
“Although we believe our markets overall will begin to improve in 2014, the timing is difficult to predict,” Doheny said.
“Until a sustained demand catalyst emerges, we expect our customers will continue to be cautious and selective in deploying capex.
“Our focus for 2014 will be to drive our key strategies for growth, operational excellence, talent development and delivering long term value for our shareholders.
For the 2014 fiscal year, Joy is projecting revenues between $3.6 billion and $3.8 billion. The company said it is expecting it will take more “restructuring actions” in the coming year as it continues its shift production capabilities eastward close to demand growth potential.
“This will enable us to optimize our global manufacturing and service center footprint while achieving our leverage targets,” he said, adding that restructuring costs are expected to be approximately $15 million.
