Bigger has always been better for Bucyrus
Bucyrus even manufactured big profits for the first quarter of 2009, defiantly bucking the trend of fellow American industrial giants like Caterpillar
The largest percentage gain in sales for Bucyrus, 26.5%, came from the segment that builds and services equipment for underground mining. During this very challenging period for heavy industry, the company's 2007 acquisition of underground equipment specialist DBT has proven a wise transaction. Highlighting another sign of the times, Bucyrus noted a greater bump in sales of aftermarket parts and service (up 19.3%), as compared to new equipment sales. I believe this ties in directly with the massive cuts to capital expenditures and the project deferrals which we Fools have tracked throughout the global mining industry during the past several months. For miners looking to maximize liquidity and cut costs to the core while cutting production, extending the working lives of aging equipment fleets is an obvious choice, and provides an important component of relatively inelastic demand for manufacturers like Bucyrus.
Above $2.3 billion, Bucyrus' backlog of equipment orders remains larger than it was even a year ago, when the engines of global industry were firing on all cylinders. Still, the combined insight that Fools can glean from Bucyrus' troubling 59% decrease in new orders logged during the first quarter, Joy Global's indication of $161 million in order cancellations, and holistic market commentary from both Joy Global and coal giant Peabody Energy