I love looking at the bright side of things, and that can be hard to do in this economy and market, at least before this latest bounce. Signs of strength seem to stick out more in bad times, which is why I took notice of this company’s excellent earnings report. The stock is in the right place at the right time and I believe that investors will take refuge in the stock for the foreseeable future. The stock is called Joy Global (JOYG).
According to Yahoo! Finance, the companyengages in the manufacture and servicing of mining equipment for the extraction coal, copper, iron ore, oil sands, and other minerals worldwide. The company operates in two segments, Underground Mining Machinery and Surface Mining Equipment.
Beating Estimates
JOYG reported that fiscal third-quarter earnings jumped 46% to $1.62 per share, beating the consensus estimate by 11 cents and easily surpassing last year’s figure of $1.13 per share. The company was helped by continuing strong price performance of commodities such as copper, coal, and iron ore as well increased mining projects at home.
“This has been a particularly good quarter for us,” said Mike Sutherlin, President and Chief Executive Officer. “Our results continued the trend of strong operating performance, and we made two major strategic moves that will add long-term value. Very good operating leverage on strong sales growth enabled us to deliver another record for operating margin, before the impact of LeTourneau. “
Most good reports involve a lifting of future projections and this one is no different. The company said earnings per share for FY2011 should be between $5.70 and $6, with the current consensus at $5.74. Management did sound a note of caution stating that macroeconomic concerns could slow demand growth. I agree this is a concern, but the drivers that have pushed commodities and mining high are still in place and should continue even if there is a prolonged slowdown.
I also like the company’s 38% ROE and 20.5% operating margin. Debt is manageable at only 20% of equity and the stock is still attractively valued at less than 12x forward earnings. Basically this is a growth company in a non-growth economy.
A Truly JOYful Quarter is an article from: 
