Q2 2011 Earnings Call Transcript

Transcript Call Date 06/02/2011

Operator: Good day everyone and welcome to the Joy Global Incorporated Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the conference over to Mr. Mike Olsen, Executive Vice President and Chief Financial Officer. Please go ahead, sir.

Michael S. Olsen - EVP, CFO and Treasurer: Thank you, Jennifer. Good morning and welcome everyone. Thank you for participating in today's conference call, and for your continued interest in our Company. Joining me on the call this morning is Mike Sutherlin, President and Chief Executive Officer; and Shawn Major, Executive Vice President, General Counsel and Secretary.

This morning I will begin with some brief comments which expand upon our press release and would provide some additional background on the results for our second quarter. Mike Sutherlin will then provide an overview of our operations and our outlook. After Mike's comments, we will conduct a question-and-answer session.

During this session, we ask you to limit yourself to one question and one follow-up question before going to the back of the queue. This will allow us to accommodate as many questioners as possible.

During the call today, we will be making forward-looking statements. These statements should be considered along with the various risk factors detailed in our press release and other SEC filings. We encourage you to read and become familiar with these risk factors. We may also be referring to a number of non-GAAP measures, which we believe are important to the understanding of our business. For a reconciliation of non-GAAP metrics to GAAP, as well as for other investor information, we refer you to our website at

Now, let's spend a few moments reviewing the results for the second quarter of the 2011 fiscal year.

Bookings in the current quarter were $1.5 billion compared to $1 billion in the second quarter last year. The current quarter bookings were 46% higher than the strong bookings reported a year ago, with original equipment orders up almost 80% while aftermarket bookings were 22% higher.

Both of the Company's business segments had significant increases in original equipment orders in the second quarter compared to a year ago. The underground equipment business had a 48% increase and the surface mining equipment business reported OE bookings 1.5 times as high as the orders received last year.

The improvement in the underground equipment OE bookings was due to the increase in orders for battery haulers and crushing and conveying equipment used in room and pillar applications in the United States, and longwall equipment system orders received in Australia.

Underground equipment OE orders reflected a recovery in the U.S. coal market and a continuation of the longwall system projects in Australia. Underground OE bookings in China were lower than they were a year ago, as several orders are waiting for final customer approvals.

The 159% increase in surface original equipment bookings was due to orders received for 12 electric mining shovels and five drills in the current quarter. OE bookings were strong in North and South America, South Africa, and Russia. Orders for new machines were received from coal, copper, and iron ore customers, and as a result of these customers looking to add capacity.

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