The increased order bookings were a reflection of continued strength in international markets and a resurgence of the US underground coal market. Orders for original equipment increased more than threefold, while aftermarket orders were up strongly at 40%.
Underground equipment orders increased 89% to a record $743 million in the quarter with order growth led by the US, with Australia and South Africa also posting meaningful order increases.
“Although orders were up significantly in all product categories, they increased most strongly in room and pillar products, reflecting acceleration of mine expansion programs by the company's domestic customers to take advantage of exceptional demand and pricing as the US continues to grow its coal exports,” Joy said.
The US contributed 48% of total revenue growth.
Overall, net sales were up 45% compared to the same quarter last year at $904 million.
Operating income was not as strong, increasing $24 million to $134 million after being adversely affected by purchase accounting charges associated with the acquisition of Continental Global Group, the extension of the union contract at the P&H Milwaukee operations, foreign exchange movements, and operating costs for the start-up of the P&H China factory and acceleration of research and development programs.
“Bookings for the current quarter were a record-high $1.5 billion, with quarterly orders averaging over $1 billion for the last four quarters,” Joy CEO Mike Sutherlin said.
“The latter supports our view of the long-term strength for equipment demand as our customers continue to expand mine production to fill the gap between available supply and growing demand.
“Our capacity expansion programs are beginning to deliver results, with 32 per cent revenue growth in the quarter before adding in Continental. Despite record revenues, our backlogs have extended, and we continue to increase our capacity expansion plans to meet the needs of our customers.”
Developing markets continued to grow, with Joy making significant financial commitments.
Joy continued to invest in the start-up of manufacturing in China and in the development of new products and technologies during the quarter which resulted in additional charges of $1.9 million and $3.2 million, respectively.
“The company believes that the China start-up, R&D and incentive compensation costs will continue, and that purchase accounting charges will decline to an interim annual run rate of approximately $6 million in fiscal 2009. The other cost increases are related to events specific to the current quarter,” said Joy.
Looking ahead, Joy said it expected revenues of $3.3–3.4 billion and added that it now expected earnings per fully diluted share to increase from the previous range of $3.15–3.30 to $3.37–3.52.
