A Solid End to a Basing Year
Joy Global managed to produce a solid end to an unspectacular year. Revenue rose 9% from the year-ago level, with good balance between its two major operating segments. Underground equipment sales rose over 8%, while surface equipment sales increased 10%. Slicing the numbers differently, original equipment sales were basically flat, while aftermarket sales increased 16% and made up nearly 60% of revenue. That revenue figure was well ahead of consensus expectation, so it is unlikely that many investors will quibble with the fact that Joy Global produced a book-to-bill ratio of nearly one, as the company saw a 53% jump in order bookings.
Profitability was strong this quarter. Gross margin improved over 100 basis points from last year, while the operating margin increased by 250 basis points. That is powerful operating leverage relative to the revenue growth, though the company almost certainly got a benefit from the steel price environment that has bedeviled producers like Nucor (NYSE:NUE) and Steel Dynamics (Nasdaq:STLD).
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