Joy Global Q3 has presented lower than usual 2014 earnings and blames the misses found on the thermal coal landscape. Joy Global is known to be one of the industries famous for mining equipment development and services. Their products suits both underground and opencast mining. With the persistent decrease in coal mining, Joy Global is also experiencing the decline as well.
With the decreasing consumption, the oversupply has also affected the full year forecast of this year. Consolidated sales fell to 34 percent ($876 million) as compared to 2013 results and even with an increase of 33 percent in mining equipment ($923 million) for this year. For the first quarter, there was 61 percent decline with a net income of only $71.3 million.
Doheny also expressed that they are encouraged with the recent acquisition of Mining Technologies Internation (MTI) and other product development projects that place a long-term growth on underground hard rock mining. However, Forbes sees all these instances contributing to the further decline of sales of Joy Global. With the production cuts in China and geopolitical situation of Ukraine, the coal inventories will become oversupplied therefore decreasing prices of up to $70/t.
These and other issues faced and evidenced by the Joy Global Q3 remains an issue. The company hopes for an increase next year as they plan to build a construction area in Russia to rebuild potential in Novokuznetsk. Nonetheless, Ivan Szpakowski, Citi Analyst, is pessimistic about this with their bullish views on developments on coal industry profits of Joy Global Q3.