Joy Global has posted another disappointing quarterly result, with profit falling year on year, but is seeing a rise in bookings.
The mining machinery manufacturer recorded an operating profit of US$119 million for the third quarter of 2014, falling from US$274 million in the previous corresponding period.
Much of this was due to a slump in total net sales, which fell by approximately 34 per cent compared to last year, dropping from US$ 1.32 billion down to US$857 million.
It was hit hardest in the underground machinery sector, dropping from US$722.7 million down to US$470.7 million.
Original equipment sales also took a major hit, decreasing 59 per cent year on year.
Despite this poor performance it is still an upswing for the company, which in the first quarter recorded a 65 per cent fall in net income year on year, with total operating profit recording a 61 per cent fall from US$ 221 million in 2013 to US$85.2 million in the first quarter of 2014.
In more positive new for the company bookings actually increased for the manufacturer, seeing an increase of 37 per cent for underground mining machinery, a jump of in original equipment orders of 195 per cent compared to last year, and a 36 per cent increase in surface mining equipment bookings.
This comes on the back of market rumours of a takeover for the company, which first surfaced in July, and generated the largest spike in Joy Global’s stock price since 2011.
Looking ahead the company remains positive.
"Despite the depressed commodity pricing environment and oversupplied markets, our performance remains solid and we continue to see stability in our core service business," Joy Global CEO Ted Doheny said.
“During the quarter, service bookings were up nearly 7 per cent from last year marking the third consecutive quarter of growth. Service bookings growth tied to our global shovel fleet was driven by strength in global copper markets.
“Additionally, we saw some improvement in our service business related to U.S. coal market rebuilds as the ability of some of our customers to continue to delay maintenance appears to be reaching an end.”
"Another area where we see opportunities is in the iron ore market. Although prices have declined nearly 30 per cent since the beginning of the year, the steep global cost curve continues to provide service opportunities for our installed base with lower-cost producers,” he said.
"While market conditions remain tough, we are seeing signs that the trough in the market has been set. During the quarter, rolling twelve month bookings increased sequentially for the first time since the first quarter of 2012. Strengthening economic growth should drive demand, but this will be tempered with supply rationalisation in certain markets and result in a slower growth profile looking forward.”