Investopedia: Joy Global - Minerals or Machines?

It is interesting to see that Joy Global (Nasdaq:JOYG), one of the world's leader manufacturers of mining equipment, is still trading at historically healthy multiples while many leading miners like Vale (Nasdaq:VALE) and Freeport McMoRan (NYSE:FCX) have been a little weaker. Then again, with long lead times for new equipment and fewer vendors to choose from (especially now with the Caterpillar (NYSE:CAT) acquisition of Bucyrus), it makes a certain amount of sense that Joy Global would be seen as the more stable, longer-term play. 


A Solid Second Quarter
Joy Global rebounded from a disappointing fiscal first quarter with a strong performance this time around. Revenue rose 19% and though it did not top the very highest analyst estimates, it was still a fair bit stronger than the middle of the range. Revenue growth was also relatively balanced; original equipment sales were up 10%, while aftermarket was up 24%. Growth was also split nicely between underground and surface; up 19% and 15% respectively, with underground still representing more than half the total business.

With stronger aftermarket equipment sales, it was not surprising to see stronger margins at Joy Global. The company picked up some momentum on the gross margin line and ultimately saw operating margin expand almost two points as operating income increased nearly 30% from the year-ago level. 



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