Joy Global Sees Profit Rise in 2nd Quarter
June 6, 2014
After a rough 2013 that saw profits drop steadily, mining equipment maker Joy Global reported a better-than-expected quarterly profit and said orders for maintenance services rose for the second straight quarter, according to a recent article in Reuters.
Miners had put off servicing equipment for over a year as the markets took a tumble and exploration projects were put on hold due to an uncertain global economy. However, Joy Global, which gets 2/3rds of its revenue from coal miners, said service orders rose about 8 percent in the second quarter ending May 2nd. Maintenance made up roughly 2/3rds of the quarter's orders.
Though total orders fell 7 percent to $1.05 billion from a year earlier, it was up 22 percent from the first quarter. In addition to coal miners, Joy Global also supplies iron, ore and other mining minerals.
Markets analyst Joel Tiss, of BMO Capital, said that the $1 billion in orders gave hope that the company was stabilizing but Joy Global remained cautious in its outlook for the rest of the year.
In a statement released to the press, the company said, "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".
Weak demand in Europe and Asia have led many coal companies to idle their mines in the hopes of boosting prices for metallurgical, or steelmaking, coal as the 2-year long slump in prices continued.