Joy Global Mines Money From Commodities Boom by Melinda Peer:
Mining equipment maker Joy Global is extracting profits from the booming commodities sector as orders soared past the $1 billion mark, prompting the company to raise its full-year guidance on a favorable outlook for global mining.

Shares of the Milwaukee, Wis.-based company gained $3.43, or 4.4%, at $81.31 during mid-morning trading on Thursday. Shares of rival manufacturer, Bucyrus International (nasdaq: BUCY - news - people ), also rose as Joy Global (nasdaq: JOYG - news - people ) predicted that soaring demand for strained raw materials will continue for at least three to five years. The stock added 64 cents, or 0.6%, to $68.15.

Second-quarter net income, pressured by higher expenses, slipped 7.1% to $72.1 million, or 66 cents a share, from $77.6 million, or 71 cents a share, in 2007's second quarter. Earnings included charges related to an acquisition and a terminated contract. Analysts polled by Thomson Financial were expecting earnings of 72 cents a share.

Second-quarter sales rose 34.0% to $843.1 million from $629.2 million a year ago, exceeding analysts' expectations for sales of $798.3 million.

Orders for the quarter shot up 69.0% to $1.2 billion from $728.0 million as the demand for coal, copper, iron ore and oilsands--especially from developing markets like China and India--fueled orders for the company's underground and surface mining equipment.

"All of these major commodity markets that the company serves have extremely thin supply surpluses, or most often, significant supply deficits, as commodity supply increases to date have been unable to match commodity demand growth," the company said.

Its backlog jumped to $2.4 billion during the quarter from $990.0 million.

"The fundamentals and outlook for our markets are stronger today than at any other time since this growth period began in 2003," said Mike Sutherlin, Joy's president.

The manufacturer said efforts to reduce delivery lags and capacity improvements should be realized in the second half of 2008. It raised full-year earnings guidance to between $3.15 and $3.30 a share from between $2.96 and $3.22 a share and boosted sales guidance to between $3.3 billion and $3.4 billion from $3.1 billion to $3.3 billion, previously.

Analysts had been expecting full-year earnings of $3.27 a share and sales of $3.2 billion. Back To News

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