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Milwaukee-based Joy Global
As Joy Global continues to work its way through an order backlog that peaked around $3.17 billion before conditions soured, the company posted a 10% increase in net sales and a whopping 67% increase in net earnings. The company's efforts to reduce operating costs clearly have paid off, with operating income at an impressive 20% of net sales versus 14% in the prior-year quarter. Competitor Bucyrus
Near-term red flags for the equipment manufacturing industry include Joy Global's tally of $300 million in cancelled orders over the past three quarters, $525 million in existing orders considered at risk of cancellation, and a 47% reduction in new order bookings. Joy cautions that China's major restocking efforts for resources like copper and iron ore are not likely sustainable at these rates … suggesting the possibility of a near-term correction for miners like Freeport-McMoRan
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Fool contributor Christopher Barker is the Nat King of Coal and the wild boar of iron ore. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns shares of Cliffs Natural Resources, Freeport-McMoRan, and Peabody Energy. The Motley Fool's disclosure policy is busy learning Mandarin.