Mining Equipment Companies Rise on Earnings and M&A Newsadmin
Share of mining equipment companies got a boost Monday on news that one member of the group had quarterly results that easily beat Wall Street predictions and another said it will acquire an underground coal mining equipment business.
Joy Global Inc. announced before the market opened that its fiscal fourth-quarter profit jumped 52 percent on overseas demand for its underground equipment products.
The company said new orders rose 20 percent, but orders from U.S. coal companies fell by more than one-third. Strong demand for its underground equipment in other markets, particularly Australia and the U.K., offset that weakness.
In morning trading, Joy Global shares were up $4.24, or 9.6 percent, to $48.44 on the Nasdaq, after surging as high as $50.77 shortly after the market opened.
Over the past year, the company’s shares have traded between $31.32 and $72.23.
Baird’s Robert F. McCarthy reiterated his “Outperform” rating and $60 price target for the Milwaukee-based company, saying he expects to raise his estimates for the company.
Meanwhile, shares of Bucyrus International Inc. also rose following the company’s Sunday announcement that it will acquire DBT GmbH, a subsidiary of RAG Coal Intl., in a cash and stock deal worth about $731 million.
With the acquisition of the Germany-based business, Bucyrus, formerly a surface mining equipment company, expands into the underground mining equipment market.
DBT has eight facilities around the world with about 3,200 employees and generates about $1 billion in annual revenue.
In morning trading, Bucyrus shares rose $5.67, or 13.3 percent, to $48.40 on the Nasdaq, after climbing as high as $48.44 earlier in the day.
Over the past year, the South Milwaukee, Wis.-based company’s shares have traded between $29.87 and $60.71.
In a separate report, McCarthy reiterated his “Neutral” rating and $52 price target for Bucyrus, saying the proposed acquisition makes “tremendous strategic sense.”