UPDATE 2-Joy Global profit beats, mining equipment care picks up

Thu Jun 5, 2014 9:54am EDT

* 2nd-qtr adj. earnings/shr $0.76 vs est $0.71

* Service bookings up 8 pct

* Shares rise as much as 5.3 pct (Adds forecast, analyst comment, details, share move)

By Sagarika Jaisinghani

June 5 (Reuters) - Mining equipment maker Joy Global Inc reported a better-than-expected quarterly profit and said orders for maintenance services rose for the second straight quarter.

Joy Global shares rose as much as 5.3 percent in early trading on Thursday.

Demand for equipment maintenance has picked up in 2014 after miners put off servicing for more than a year due to a coal supply glut that led to weak prices.

Joy Global, which gets about two-thirds of its revenue from coal miners, said service orders rose about 8 percent in the second quarter ended May 2. Maintenance made up about two-thirds of the quarter's orders.

The company, which also supplies to miners of copper, iron ore and other minerals, said total orders fell 7 percent to $1.05 billion from a year earlier, but were up 22 percent from the first quarter.

BMO Capital Markets analyst Joel Tiss said more than $1 billion in orders gave some hope that the company's business was stabilizing.

Joy Global, however, remained cautious in its outlook for the rest of the year.

"While improving economic conditions should drive increased demand, commodities remain oversupplied with prices in some cases at multi-year lows that continue to delay capital decisions," the company said.

Pricing in the metallurgical coal markets in the first three months of 2014 was the weakest since 2009, Joy Global said.

Coal companies have been idling high-cost mines in an attempt to boost prices for metallurgical, or steelmaking, coal as the two-year long slump in prices was compounded by weak demand from Europe and Asia.

Iron ore prices also declined in the past two months due to a supply glut, Joy Global said.

The company kept its forecast of earning $3.10-$3.50 per share on revenue of $3.6 billion-$3.8 billion in the year ending October.

Second-quarter net income fell to $74.0 million, or 73 cents per share, from $181.6 million, or $1.69 per share, a year earlier.

Excluding items, Joy Global earned 76 cents per share.

Net sales dropped 32 percent to $929.7 million.

Analysts on average expected earnings of 71 cents per share on revenue of $932.1 million, according to Thomson Reuters I/B/E/S.

Joy Global shares were up 4.6 percent at $60.49 on the New York Stock Exchange after touching a high of $60.90 on Thursday morning.

They had gained about 9 percent in the year through Wednesday, lagging a 24 percent increase in the Dow Jones U.S. Industrials index. (Reporting by Sagarika Jaisinghani in Bangalore; Editing by Joyjeet Das)

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