Milwaukee-based Joy Global posted a loss in the second quarter, but the company was able to secure two major orders and its original equipment bookings were up for the first time since the summer of 2014.
The mining equipment manufacturer has now posted a loss in three straight quarters as it seeks to find cost savings while facing a challenging market.
The second quarter results included a net loss of $9.8 million or 10 cents per diluted share. Last year the company posted a $56 million profit, or 57 cents per share.
Revenue for the quarter was down 9 percent from last year to $681 million.
Ted Doheny, Joy Global president and chief executive officer, said the results for the quarter were better than expected, despite continued challenges in the commodity markets, which has hurt demand for the company’s products and services.
Joy is in the midst of cost cutting moves as it tries to manage through a significant downturn in the mining industry. The company started the year aiming for $85 million in cost savings, but increased the figure to $100 million and now says it expects to exceed that total.
Recent cost cutting moves have included the closure of its Orchard Street facility in West Milwaukee, shutting down the welding and heavy fabrication departments at its National Avenue facility and closing an 830,900-square-foot facility in Franklin, Penn.
Doheny said that as the company has progressed through the efforts, it now has a better idea of how much it will be able to save and has been able to increase its target.
While revenue was down in the underground and surface mining segments and for both products and service, the company did increase original equipment bookings to $167 million, up 12 percent from last year.
The increase was driven by booking an order for a longwall system in India that was in the works for five years and an order for two mining shovels heading to the Canadian oil sands.
Doheny said there are similar projects in India the company has a chance to land and the country represents a $500 million opportunity for the company.
“Internally, it’s a bigger number, but we hedge it back because it takes time. Everything takes longer in India,” he said.
The Canadian project included competition from a number of sources and Doheny said the customer considered Caterpillar, turning to used equipment and Chinese suppliers before picking Joy.
“We’re fighting really, really hard on product differentiation,” he said.
The project also represents a good opportunity for Joy to generate service business because of the harsh environment in the oil sands, Doheny said.
The environment also cost Joy Global during the quarter as wildfires in the oil sands will likely cost the company $10 million to $15 million in revenue this year. With that and coal production expected to fall to 700 million tons, the company is now projecting its full year revenue will be near the low end of its guidance of $2.4 billion to $2.6 billion.