Joy Global says charges will affect earnings

Joy Global Inc., a Milwaukee mining equipment manufacturer, recently updated its fiscal 2008 guidance to reflect higher purchase accounting charges related to the acquisition of Continental Global Inc. and charges associated with the expected early termination of a maintenance and repair contract. The charges will adversely affect the company’s earnings per share guidance for full-year fiscal 2008. Preliminary asset valuations associated with the purchase accounting of Continental Global, Inc. are higher than previously estimated. The additional charges resulting from these higher valuations are expected to reduce earnings per share by 5 to 6 cents for the full year, with the majority coming in the second fiscal quarter. The maintenance and repair contract costs are expected to adversely impact earnings per share by 14 to 17 cents per share for the fiscal year. Mike Sutherlin, president and chief executive officer of Joy Global, said, "The maintenance and repair contract is unique since it is associated with the first sale of a new product, and its resolution will enhance our earnings in future years. The increased purchase accounting charges for Continental will impact reported earnings but do not affect the underlying earnings ability of this business."