September 2, 2009 / 11:39 AM / 10 years ago

UPDATE 3-Joy Global Q3 beats estimates; sees lower rev in 2010

* Q3 EPS $1.21 vs est. $0.96

* Q3 rev $956 mln vs est. $902.4 mln

* Says customers still cautious on investments

* Shares fall 3 pct (Recasts; Adds details, updates share movement)

Sept 2 (Reuters) - Mining equipment maker Joy Global Inc JOYG.O reported better-than-expected quarterly results, helped partly by cost controls, but said it expects 2010 revenue to be lower than 2009 levels.

Shares of the Milwaukee-based company fell 3 percent to $35.85 in afternoon trade on Nasdaq. They had risen 113 percent in the last six months.

Joy Global, which makes giant shovels, drills and draglines to extract coal, copper, oil sands and other minerals, sees lower revenue in 2010. Even if order rates begin to improve in calendar 2010, they will not translate into shipments until 2011, it said.

“Despite an improved outlook for the international markets, we see little opportunity for the U.S. market, especially thermal coal, through 2010,” Chief Executive Mike Sutherlin said in a statement.

The company said its customers are being cautious in making capital investment decisions despite improvement in commodity prices.

“We are being engaged in discussions about projects that could be restarted and even though our customers are making serious efforts to get these projects ready to go, our best intelligence is that any orders that result will not be placed until next year,” Sutherlin said on a conference call.

The company expects its new orders to stay about 30 percent below current shipping levels.

The economic downturn has slowed orders for mining equipment, forcing companies that supply heavy equipment to the mining and energy industry to slash production and cut jobs.

Joy Global, whose main competitor is Bucyrus International Inc BUCY.O, however, raised its fiscal 2009 earnings outlook.

It now sees full-year earnings of $4 to $4.20 per share, including additional restructuring costs in the fourth quarter, up from its prior view of $3.80 to $4 per share.

It still sees 2009 revenue of $3.5 billion to $3.6 billion.

Although the U.S. market continued to slow, the rate of decline has improved from the first quarter and the trend could turn positive in the second half of the year, the company said.

Q3 TOPS STREET For the third quarter ended July 31, net income was $124.3 million, or $1.21 a share, compared with $113.1 million, or $1.03 a share, a year ago.

Net sales of the company rose 6 percent to $956 million.

Product development, selling and administrative expenses fell 3 percent to $110.2 million.

Analysts on average expected earnings of 96 cents a share, before special items, on revenue of $902.4 million, according to Reuters Estimates.

New orders were down 54 percent. New original equipment orders, before cancellations, declined 76 percent from the year-ago quarter, with the declines greatest in the P&H surface equipment business, the company said.

Decreases in aftermarket sales in the P&H surface equipment business were mainly from the copper and iron ore markets in North America, it added. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Unnikrishnan Nair)

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