Increased net sales of three percent totalling US$299 million was down to a solid performance by the company’s surface mining equipment business, P&H Mining Equipment, who posted a 16% increase in revenue.
Improvements in the absorption of manufacturing costs at P&H were offset by under absorption of underground mining machinery division, Joy Mining Machinery.
Operating earnings and EBITDA for the quarter ending May 3 was US$11.1 million and US$25.1 million, respectively, compared to US$10.4 million and US$28.1 million, respectively, in the corresponding quarter of 2002.
Net income for the quarter totalled US$2.4 million, or US$.05 per fully diluted share, whilst cash balances continued to increase reaching US$103 million.
Joy Global CEO John Hanson said he remained confident coal-related revenues from original equipment and after-market sales would rebound in the second half of fiscal 2003 as domestic conditions improved.
Hanson said the dwindling performance of Joy Mining Machinery was due to continued delays in the recovery of domestic coal markets and was most evident in the continuous miner and after-market revenue portions of the business.
Net sales for the second quarter at Joy Mining Machinery totalled US$177 million, compared to sales in the second quarter of 2002 of $185 million.
“Coal production in the U.S., particularly underground production, remained lower in the second quarter than the already depressed conditions of a year ago,” Hanson said.
“Our original equipment order rates continued to strengthen selectively during the quarter, and we expect that our factory production rates in the second half will improve. However, component repair orders have shown little, if any, improvement to this point.”
On a global outlook, Hanson said the Chinese market had slowed with incoming order rates for the second quarter sluggish.
“Our expansion activities in the emerging markets of China, India, Russia and Poland continue and we are optimistic that these markets represent significant opportunities for us in future periods,” he said.
Hanson predicted little change in the third quarter results, announcing target sales for the third quarter in the range of US$1.15 to US$1.25 billion, EBITDA in the range of US$100 to US$115 million and operating earnings in the range of US$43 to US$58 million.
“While we continue to believe the recovery in domestic coal markets will occur this year, the delay in the recovery means our operating results will not strengthen as rapidly as earlier anticipated,” he said.
“In particular, we are uncertain of the timing of the strengthening of our after-market business, principally at Joy Mining.”
