* First-quarter profit $1.33/share vs est $1.14/share
* Orders fall 29 pct, fourth consecutive quarterly loss
* Forecasts flat full-year orders, reaffirms earnings view
* Shares rise 6 percent
By A. Ananthalakshmi
Feb 27 Mining equipment maker Joy Global Inc
said it was starting to see big projects come back to
the market as global miners, looking for more returns than
volumes, begin to open up their purses to low-risk projects.
"We are seeing a lot of projects come back on to the
horizon," Joy Global Chief Executive Mike Sutherlin said on a
post-earnings conference call.
Sutherlin said the likelihood that these projects will turn
into capex deployment quickly is really high because the
projects have been evaluated under what he calls a new criterion
adapted by miners.
"They are not only changing their decision criteria from
volumes to returns but they also prefer lower risk projects."
He said the company was confident of winning two big
projects this year, adding that there could be two more in the
second half of the year.
The company said full-year orders would remain flat unless
it was able to win major projects.
Shares of Joy Global rose 6 percent to $63.75 on Wednesday
on the New York Stock Exchange. They have fallen about 20
percent since the beginning of 2012.
Joy Global's optimism comes even as global miners, facing a
sharp drop in commodity prices, have been forced to shelve
ambitious expansion projects, slash costs and sell assets to
The company, which reported a quarterly profit above
analysts' forecast, has seen orders fall for four consecutive
quarters -- the worst decline of 29 percent coming in the most
recent first quarter ended Jan. 25.
Joy Global derives about two-thirds of its revenue from coal
miners, many of which have been hit by rising competition from
cheaper natural gas as the preferred fuel for power generation
in North America.
Coal production in the United States will drop to its lowest
level in two decades in 2013, the U.S. Energy Information
Administration said in a report published in October.
Joy Global also supplies miners of copper, iron ore and
Earlier in the day, Chief Executive Sutherlin said in a
statement it would take time for Joy Global's customers to
increase capital expenditure.
"Our customers will let demand improvement reduce the supply
surplus and provide pricing support before they add capacity,"
"Unless projects are already deep in process, decisions are
not likely to be made before the second half of this year, and
therefore will not impact our revenues before next year."
High inventories are likely to delay mine expansions. U.S.
thermal coal miners, though primed for a recovery in demand as
prices again fall below those of natural gas, will take at least
a year to work through stockpiles.
Ahead of the conference call, Jefferies & Co analyst Stephen
Volkmann said the company, despite leaving its full-year
forecast unchanged, appeared more cautious than before. He also
said the company's full-year estimates will have to come down.
The CEO said on the call that he wants to build up cash for
acquisitions and stock buybacks, and that the company could
announce such plans in the second half of the year.