Joy Global (JOY) Reports Wider-than-Expected Loss in Q1

Joy Global Inc. JOY reported adjusted loss of 6 cents per share in the first quarter of fiscal 2017, wider than the Zacks Consensus Estimate of a loss of 4 cents. However, the loss was narrower than the year-ago quarter loss figure of 23 cents.

The year-over-year reduction in operating loss was due to lower restructuring and related charges, lower manufacturing spending costs, increased service volumes, favorable product mix and savings from the company's cost reduction programs.

On a GAAP basis, the company reported a break-even earnings for the quarter, significantly narrower than the year-ago loss of 41 cents. The difference between the GAAP and operating figures can be attributed to net discrete tax benefits of 12 cents and tax benefits of 1 cent. Further, there was one-time merger costs of 3 cents, and restructuring and relating costs of 4 cents.

Total Revenue

Joy Global reported net sales of $497.8 million in the first quarter of fiscal 2017, down 5.4% from the year-ago figure of $526.3 million and also lagged the Zacks Consensus Estimate of $510 million by 2.4%.

The year-over-year decline in revenues was owing to lower contributions from the Underground Mining Machinery and the Surface Mining Equipment segments.

Joy Global Inc. Price, Consensus and EPS Surprise

Joy Global Inc. Price, Consensus and EPS Surprise | Joy Global Inc. Quote

Highlights of the Release
 
Total bookings at Joy Global during the first quarter of fiscal 2017 were $615.5 million, up 12.0% from $549.8 million a year ago. Improvement in orders for the company’s legacy underground business and the surface mining businesses led to the year-over-year growth in bookings.

Product development, selling and administrative expenses in the reported quarter were $111.1 million, up 0.6% year over year.

Net interest expense in the quarter was $11.1 million, down 8.3% from $12.1 million in the first quarter of fiscal 2016.

Financial Condition
 
Cash and cash equivalents as of Jan 27, 2017 were $321.9 million, compared with $276.7 million as of Oct 26, 2016.

Cash provided from operating activities during the first quarter of fiscal 2017 was $41.4 million, compared with $108.6 million in the prior-year quarter.

Capital expenditure was $7 million, compared with $8 million a year ago.

Merger Update

On Jul 21, 2016, Joy Global entered in a merger agreement with Japanese mining and construction equipment maker and seller, Komatsu Ltd. Per the agreement, JOY Global will be acquired by Komatsu for nearly $3.7 billion, which includes the company’s outstanding debts.

The company currently expects the Komatsu transaction to close by mid-2017, or earlier, depending on the regulatory clearances.

Peer Releases
 
Caterpillar Inc.'s CAT posted the fourth quarter of 2016 adjusted earnings of 83 cents per share beating the Zacks Consensus Estimate of 65 cents by 27.7%.

Astec Industries, Inc. ASTE posted earnings of 53 cents per share in the fourth quarter of 2016, lagging the Zacks Consensus Estimate by a penny.

The Manitowoc Company, Inc. MTW reported the fourth quarter of 2016 adjusted loss per share of 23 cents, wider than the Zacks Consensus Estimate of a loss of 17 cents.

Zacks Rank
 
Joy Global carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.