Milwaukee-based Joy Global, Inc. reported a profit of just $128,000 during the third quarter as increased restructuring costs and challenging end-markets ate into the company’s results.
The company had a profit of $51.3 million during the same quarter last year.
Joy reported revenue of $586.6 million for the quarter, a 26 percent drop from last year. Sales in the underground mining segment were down 30 percent, while the surface segment was down 21 percent. Sales from services were down 21 percent, while original equipment revenue was off 41 percent.
“While the recent increase in certain commodity prices is positive, the outlook remains tepid and the financial condition of our customers is challenged, which will continue to impact both the timing and level of our incoming orders through 2017,” said Ted Doheny, Joy Global president and chief executive officer.
Joy did not hold an earnings call with analysts to discuss its results, citing its pending acquisition by Komatsu, and said it would no longer provide a quarterly update on its annual financial guidance.
Doheny said that because of difficult market conditions Joy would focus on reducing costs, accelerating the optimization of its manufacturing footprint and monetizing non-core assets.
The company incurred $24.7 million in restructuring costs during the quarter, up from $7.8 million during the same period last year. Joy said the costs primarily consisted of employee severance and termination costs, impairment charges and accelerated depreciation. The company expects another $5 million in charges during the fourth quarter as it reduces staffing levels and optimizes its manufacturing footprint.