When Backlogs Are Joyous

Last Thursday, mining equipment manufacturer Joy Global (NYSE: JOYG  ) dug deep and posted stellar first-quarter fiscal 2008 results.

Several of the headline-grabbing metrics typically tied to quarterly earnings results were impressive, including a 14% rise in revenue to $640 million, and a 27% boost in earnings per share. Margins also showed slight improvement, which is impressive, given how costs have been rising for most manufacturers lately.

While these numbers were jovial enough, what really inspired me was Joy's joyous backlog, which rose 44% from year-ago levels to a whopping $1.9 billion. Some products currently on order will not be delivered until 2010, suggesting that supplies of mining equipment will continue to lag behind industry demand for some time to come.

Accordingly, CEO Mike Sutherlin offered elated commentary on Joy's results, and on the outlook for the mining industry in the company's earnings report. That report, by the way, is uniquely insightful, and I highly recommend it to any Fool with investments or interest in mining sectors such as coal, iron ore, copper, oil sands, or the ancillary plays Bucyrus International (Nasdaq: BUCY  ) or Caterpillar (NYSE: CAT  ) .

In a time when manufacturing activity in the U.S. is under pressure, and the markets are disconcertingly volatile, the existence of a backlog in sales provides investors with welcome tangible evidence to support optimistic projections.

For the lucky Fool who bought Joy Global five years ago, the company has returned an incredible 1,400%. If Sutherlin's outlook for continued product demand is accurate, then Fools invested in Joy Global will be smiling for years.

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