Joy Global released their annual report today, December 14, 2011. Despite positive words from CEO Mike Sutherlin, saying "Our fourth quarter was a good finish to an exceptional year,” the market interpreted the results in a much different manor. Missing their quarterly EPS $.06, a 3.3% miss, the stock opened down 4.84% and his since fallen further to an 11.85% loss for the day. The miss on EPS combined with a 2012 annual EPS target set by the company of anywhere between $7.00 and $7.40, a high range, especially considering the market is expecting 7.19, allowing for room for failure.
In the report itself, Joy Global stressed its increase in future bookings and a more forward approach discussing the future growth more than the current year’s success, or lack thereof. With the purchase of LeTourneau Mining, combined with the future bookings, does not rule out the possibility of a large comeback year, especially if Joy Global can hit the upper end of its projected EPS. The downsides continue with growth for mining in India and China not appearing as vibrant as once thought, with FactSet stating that the region will "grow at a more moderate rate in 2012." AS banks start to react to this news, favorability towards the stock is declining with JPMorgan lowering its price target for the company from $97 to $85, a 14% decrease. With so much growth of the company dependant on world macroeconomic success, JPMorgan felt that the company would continue its sluggish growth until we began to see more of an economic upturn.
- Matt Buechele