Shares of Joy Global spiked 12 percent Thursday after the drilling equipment company reported better-than-expected quarterly profit.
The Milwaukee-based company reported adjusted earnings of 9 cents per share, above Wall Street consensus estimates of zero cents, according to Thomson Reuters. Profit in the second quarter was helped by an increase in service sales and cost cuts, the company said.
Shares of Joy Global, which manufactures equipment for extracting copper, coal, oil and other commodities, lost roughly 50 percent of their value year over year. Commodity prices and demand for mining have fallen sharply, which hurt the bottom line, the company said.
Revenue for the second quarter was down 26 percent from a year earlier, coming in at $602 million, below consensus of $605 million. The company announced that guidance would be at the lower end of previous forecasts of $2.4 billion to $2.6 billion for sales, and 10 to 50 cents for earnings.
Equipment orders were undercut by foreign currency exchange moves, the company said. Overall bookings for the mining equipment company fell to $681 million, down 9 percent from a year ago. Original equipment orders though, were up 12 percent. Underground-mining equipment orders took the biggest hit, down 17 percent year over year.
"Despite ongoing challenges in commodity markets, our bookings and financial results in the second quarter were better than expected," Ted Doheny, president and CEO of Joy Global, said in a statement. "We remain focused on delivering on our customer and shareholder commitments in the toughest mining market we have seen in decades."
While commodity markets move closer to rebalancing, other major mining companies are also facing strained cash flows and high levels of debt, "both of which continue to negatively impact near-term order rates," Joy Global said in a statement.
Shares traded near $19 Thursday, down from their 52-week high of $41. The stock is down more than 50 percent year over year but has recovered some losses in 2016, up more than 46 percent year to date.