Mining equipment manufacturer Joy Global recently reported record sales of $1 billion for the fourth quarter, up from $735.9 million for the same period in 2007. However, the Milwaukee-based manufacturer expects a slowdown in 2009.
The company’s net income in the fourth quarter grew to $118 million, $1.11 per share, up from $69.6 million, 64 cents per share, a year earlier.
For the full year, Joy Global reported net income of $374.3 million on sales of $3.4 billion.
“Order rates continued to be strong, indicating our customers’ commitment to the fundamentals for the mining industry,” said Mike Sutherlin, president and CEO of Joy Global. “We did an excellent job of translating those orders into record revenues at margins that are at the top of our target range. More importantly, we made substantial progress on working capital, with a reduction in absolute amount from the year-ago period and even greater progress when measured in days of working capital. As a result, we finished 2008 as a stronger, more focused company, and one which is better prepared to handle the volatility and uncertainty for the year ahead.”
Sutherlin added that the global economic slowdown is reducing demand for commodities, forcing prices down and limiting mining company cash flows.
“The major economies of the world are expected to continue weakening,” he said. “Despite the predictability that our backlogs provide, we must also consider this uncertainty as we manage through 2009. Therefore, we have taken steps to restrict increases in headcount, expenses and capital expenditures to ensure we can deliver performance under a wider range of possible outcomes. Although this may limit our ability to grow revenues in 2009, we believe it is a precautionary but appropriate step to take at this time.”