Joy Global Inc. (JOYG) is trading near its 52-week high of $67.29 after raising guidance following a strong third quarter.
Joy Global manufactures heavy mining equipment. It was founded in 1884 and is headquartered in Milwaukee, Wisonsin.
Joy Global has a market cap of $6.8 billion. It is a Zacks #2 Rank (buy) stock.
Third Quarter Beat by 11%
The company reported third quarter earnings per share of $1.13, well above the Zacks Consensus Estimate of $1.02. Net sales were down 11% from the third quarter of 2009, but new orders were up 51% from the same period.
Joy Global also improved its gross margin from 31.8% to 34.1%. Its operating margin was essentially flat at 20.3%. Cash flow from operations increased 75% year-over-year.
Raising Guidance
Management is optimistic about its near-term outlook. The company mentioned in its latest earnings release that “[a]lthough equipment demand is increasing across all commodities and all geographies, the strongest near term upside is expected in the commodities of coal and copper and in the countries of China, Australia, Chile and Russia.”
Management expects full year 2010 revenue between $3.35 and $3.40 billion. Management also raised full year earnings guidance to $4.10-$4.15 per share, up from $3.85-$4.00. The Zacks Consensus Estimate is slightly higher at $4.16. Analysts are expecting 16% earnings growth in 2011 to $4.80 per share.
Fundamentals
Joy Global recently traded at 15.8x earnings, a premium to the industry average of 11.9x. Return on equity was 44% over the last twelve months.
Its dividend yield of 1.1% is above the industry average of 0.2%.
The Chart
JOYG recently hit its 52-week high after releasing third quarter results. The MACD chart is currently showing a bullish signal.
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