Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and Joy Global (JOY +0.00%) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.
Joy Global is a huge player in the mining equipment industry, but that's been a scary place to be lately as the global economic slowdown has had a particularly big impact on commodities. Can the equipment-maker bounce back? Let's take an early look at what's been happening with Joy Global over the past quarter and what we're likely to see in its quarterly report on Wednesday.
Stats on Joy Global
|
Analyst EPS Estimate |
$1.14 |
|
Change From Year-Ago EPS |
(14%) |
|
Revenue Estimate |
$1.08 billion |
|
Change From Year-Ago Revenue |
(4.8%) |
|
Earnings Beats in Past 4 Quarters |
2 |
Source: Yahoo! Finance.
Will Joy Global dig up better results this quarter?
Analysts have pulled back on their estimates for Joy Global substantially over the past three months, with a nearly $0.20 per share cut in earnings estimates for the just-ended quarter and more than $0.55 in reductions for the full 2013 fiscal year. Yet investors have been more optimistic, with the stock rising more than 10% since mid-November.
Joy Global has had to deal with adverse trends in the global economy throughout the past year. With the company having specifically identified China as a major source of increasing long-term sales in the coming years, intense competition combined with falling capital expenditures from mining companies have hurt Joy Global. In particular, Caterpillar (CAT 3.37%) has also identified China as part of its growth strategy, and even it has reined in expectations about its growth several years into the future.
Yet Joy Global and many of its peers look exceedingly cheap right now. Although it doesn't have the food-based demographic argument that favors ag-equipment maker Deere, Joy Global nevertheless is priced for continuing weakness. Any results that end up better than the worst-case scenario could leave Joy Global investors looking at substantial share-price gains from currently depressed valuations.
In its quarterly report, look for any further comment on the discussion that's arisen about General Electric (GE 1.04%) possibly bidding for Joy Global. GE is getting into the mining-equipment business, and an acquisition would be the fastest way to ramp up its presence in the industry to go up against Caterpillar. In the absence of a buyout, investors can only hope that the global economy will pick up in full force in the coming year.
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