{"id":34879,"date":"2016-03-03T16:43:53","date_gmt":"2016-03-03T22:43:53","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=34879"},"modified":"2016-03-03T19:03:05","modified_gmt":"2016-03-04T01:03:05","slug":"joy-global-shares-digging-out-from-their-deep-hole","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/joy-global-shares-digging-out-from-their-deep-hole\/","title":{"rendered":"Joy Global shares digging out from their deep hole"},"content":{"rendered":"

By Harvard Zhang<\/strong><\/p>\n

Joy Global Inc.\u2019s shares surged after the opening bell Thursday after the company \u2013 plagued by abysmal conditions in the mining industry, tumbling metal prices and sluggish global demand \u2013 turned in a deeper-than-anticipated fiscal first quarter loss.<\/p>\n

In the quarter ended Jan. 29, the Milwaukee, Wis.-based maker of mining equipment swung to a worse-than-expected net loss of $40.2 million, or 41 cents per diluted share, in contrast to a profit of $30.5 million, or 31 cents per share, a year ago.<\/p>\n

The per-share loss was more serious than a consensus 13 cents loss that analysts surveyed by Bloomberg had expected.<\/p>\n

Joy\u2019s first-quarter sales dropped 25.2 percent to $526.3 million from $703.9 million a year ago.<\/p>\n

<\/p>\n

The mining company has faced mounting pressure from a bleak U.S. coal market, as well as dwindling demand for copper and coal from China, which is experiencing an economic slowdown.<\/p>\n

The mining companies that are Joy Global \u2019s customers have been cutting back on equipment expenses, as commodity prices weighed on their revenue.<\/p>\n

\u201cOverall a tough quarter, without a doubt,\u201d Ted Doheny, CEO of Joy Global, said in a Thursday conference call with analysts. \u201cWe\u2019re now targeting $100 million in year-over-year cost savings.\u201d<\/p>\n

Investors, despite the downbeat earnings, gave Joy\u2019s latest results a warm welcome: In New York Stock Exchange trading Thursday, Joy\u2019s battered shares soared $2.77, or 21% to close at $16.09. Even with Thursday\u2019s rebound, Joy shares are down a punishing 71 percent over the past two years.<\/p>\n

Joy Global’s battered shares<\/h2>\n

[field name=”chart”]<\/p>\n

The mining-product manufacturer’s shares tumbled 71 percent in the past two years despite Thursday’s stock surge. (Harvard Zhang\/MEDILL)<\/div>\n

\u201cIf you think there\u2019s gonna be a revival in capital expenditure for mining companies in the back half of 2016, you buy in the stock,\u201d said Gordon Johnson, Managing Director at New York City-based Axiom Capital Management Inc., in an interview. \u201cIf you don\u2019t, you should be selling it. We do not.\u201d<\/p>\n

The Wednesday earnings report was \u201cno-doubt horrible,\u201d Johnson added. \u201cJoy Global didn\u2019t buy back any stock, they miss on the bottom line, they cut their guidance, their bookings are at record lows, that is indicative of their future revenues.\u201d<\/p>\n

For the full year, Joy Global expected an adjusted per-share earnings of 10 cents to 50 cents, roughly in line with analysts\u2019 estimate of 24 cents. Last year\u2019s per-share net was $1.95.<\/p>\n

The company\u2019s sales forecast said it expects sales in a range of $2.4 billion and $2.6 billion, also in line with analysts\u2019 estimate of $2.49 billion \u2013 and down sharply from last year\u2019s revenue of $3.17 billion.<\/p>\n

Photo at top: An excavator operating at a mining site. Mining-product manufacturer Joy Global’s shares surged despite posting worse-than-expected first-quarter profits. (Tobias Mandt<\/a>\/Flickr)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Harvard Zhang Joy Global Inc.\u2019s shares surged after the opening bell Thursday after the company \u2013 plagued by abysmal conditions in the mining industry, tumbling metal prices and sluggish global demand \u2013 turned in a deeper-than-anticipated fiscal first quarter loss. In the quarter ended Jan. 29, the Milwaukee, Wis.-based maker of mining equipment swung […]<\/p>\n","protected":false},"author":224,"featured_media":34894,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,585],"tags":[],"class_list":["post-34879","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2016"],"yoast_head":"\nJoy Global shares digging out from their deep hole - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/joy-global-shares-digging-out-from-their-deep-hole\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Joy Global shares digging out from their deep hole - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Harvard Zhang Joy Global Inc.\u2019s shares surged after the opening bell Thursday after the company \u2013 plagued by abysmal conditions in the mining industry, tumbling metal prices and sluggish global demand \u2013 turned in a deeper-than-anticipated fiscal first quarter loss. 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