Joy Global Sales Drop in 3Q

September 5, 2014

Joy Global Inc. reported third quarter fiscal 2014 results, with consolidated net sales totaling $876 million, a 34 percent decrease versus the third quarter of 2013. Original equipment sales decreased 57 percent and service sales decreased 14 percent compared to the prior year.

Net sales for underground mining machinery decreased 35 percent in comparison to the third quarter of last year. Original equipment sales decreased 59 percent compared to the prior year, with decreases in all regions. Service sales decreased 11 percent compared to the prior year, with an increase in North America more than offset by decreases in all other regions.

Net sales for surface mining equipment decreased 32 percent in comparison to the third quarter of last year. Original equipment sales decreased 54 percent compared to the prior year. Service sales decreased 17 percent compared to the prior year.

Operating profit for the third quarter of fiscal 2014 totaled $119 million, compared to $274 million in the third quarter of fiscal 2013. Excluding restructuring and pension curtailment charges, operating profit for the third quarter of fiscal 2014 totaled $133 million, compared to $278 million in the third quarter of fiscal 2013, and return on sales was 15.2 percent for the third quarter of fiscal 2014, compared to 21.0 percent in the third quarter of fiscal 2013. The decrease in operating profit, before restructuring and pension curtailment charges, was due to lower sales volumes and lower manufacturing cost absorption partially offset by cost savings from the company's restructuring programs and lower incentive based compensation expense.

"The Joy Global team continues to execute well in a challenging commodity market environment," said Ted Doheny, president and CEO. "We continue to see stability in our core service business and have achieved another quarter of solid cash generation which enabled further progress on our share repurchase program. Additionally, we are encouraged about the recent acquisition of Mining Technologies International Inc. (MTI) and product development projects that position the company for long-term growth in underground hard rock mining. Overall, we executed according to plan in the third quarter and took several positive steps to advance our business strategy."

The company expects fiscal 2014 revenue in the range of $3.65 billion to $3.75 billion, and full year earnings in the range of $3.15 to $3.30 per diluted share excluding restructuring and pension curtailment charges and other unusual items. This compares to the previous revenue guidance of $3.6 billion to $3.8 billion and adjusted fully diluted earnings of $3.10 to $3.50 per share.

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