Incoming orders were 28% above the 2005 fourth quarter and drove fourth-quarter financial results to exceptional levels. Net sales increased 21% to $689 million, operating income was up to $132 million, and net income reached $85 million.
Joy said with the exception of the US coal market – where orders declined by nearly one-third – strength was enjoyed in most areas.
Stamler-related orders comprised just over one-third of the 20% increase in new orders.
Aftermarket orders were also strong, increasing 15%.
The company saw particular strength in underground original equipment shipments in the US, up more than 60%. Non-US revenues grew more modestly than other areas reflecting the inherent quarterly “lumpiness” of the business.
The OEM said the outlook for the majority of its markets remained strong; however, the main area of concern is the temporary softness in US coal. A number of the company’s US coal customers have announced either production curtailments or the deferral of previously planned production increases.
“The company does not see evidence of improvement early in fiscal 2007. The softness in this market has been largely weather-related and as such it is difficult to forecast an eventual upturn,” Joy said.
Incoming CEO Mike Sutherlin said the willingness of Joy’s US customers to cut back production in the face of lower coal demand, and their quick response to do so, will limit the historical pattern of building excess stocks that must then be depleted before higher production levels can be resumed.
“However, the long-term supply and demand situation for coal in the US is favourable based on the announcements for new coal-fired power plants, the age of existing coal mines, the accelerated retrofitting of existing plants with scrubbers, and a variety of new coal technology projects,” the company said.
Last month additional projects were approved by the board of directors to increase machining capacity.
“The expansion projects in Milwaukee, China and Poland are on track and, along with a recent acquisition in Australia, will further extend our global manufacturing and service footprint.”
Joy has forecast revenues of $2.7–3 billion over the coming 12 months, translating into a growth rate of 13–25%, with approximately 5% growth provided by the acquisition of Stamler.
“While we anticipate that aftermarket revenues will grow in all markets, we expect the growth in aftermarket revenues in the US coal market in the coming year to be muted, and will likely result in a moderation of the overall aftermarket revenue growth rate to a low double-digit or very high single-digit level,” Sutherlin said.
Operating profits in fiscal 2007, including approximately $11 million of Stamler-related amortisation, are expected to be $510–570 million.
