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Research In Motion, Google, Apple, Joy Global Incorporation and Caterpillar

^{Published on 2010-12-17 07:11:14 - Market Wire}
 

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Research In Motion Ltd.(Nasdaq: [ RIMM ]), Google(Nasdaq: [ GOOG ]), Apple(Nasdaq: [ AAPL ]), Joy Global Incorporation(Nasdaq: [ JOYG ]) and Caterpillar Inc.(NYSE: [ CAT ]).

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Here are highlights from Thursdaya™s Analyst Blog:

RIMM Outperforms Zacks Estimate

Research In Motion Ltd.(Nasdaq: [ RIMM ]) recently reported fiscal third-quarter earnings per share of $1.74, which was a dime, or 6%, better than the Zacks Consensus Estimate. This mobile communications giant also announced revenue of $5.49 billion, topping Zacks' expectation of $5.38 billion while gaining 40% year over year and 19% sequentially.

While this was all good news, none of it was unexpected. When youa™re talking about RIMM today, youa™re really comparing this company to Google(Nasdaq: [ GOOG ]) andApple(Nasdaq: [ AAPL ]). The competition in RIMMa™s industry is intense, and will likely get even more so when Applea™s blockbuster iPhone becomes available on Verizon.

RIMM sells most of its Blackberrys through Verizon. Will it be able to keep up with Apple? RIMM shipped about 14.2 million devices in the quarter, which was in-line with expectations. There were about 5.1 million net new BlackBerry® subscriber accounts added in the quarter, which was at the lower end of the expected range between 5 million and 5.4 million range.

As for the fiscal fourth quarter, Research In Motion forecasted earnings per share between $1.74 and $1.80, which is above the Zacks Consensus Estimate of $1.61. It also expects revenue of $5.5 billion to $5.7 billion.

The company is currently a Zacks #3 Rank (aholda™). Earnings estimates of late have been inching a bit higher, but the agreement among analysts and magnitude of the revisions leave some to be desired a" especially for a company that is as well-represented as RIMM.

All 13 of the earnings estimate revisions in the past 30 days for this fiscal year have been to the upside, which is certainly good news. However, there are 47 total estimates for the period ending February 2011; so nearly three-fourths of the analysts have been on the sidelines for a while now. Therefore, the Zacks Consensus Estimate of $6.08 per share is up only 3 cents in 30 days, or less than 1%.

But the outlook is up 8.6% over the past 3 months.

Ita™s a similar story for next fiscal year, ending February 2012. Out of 45 total estimates, there have been 13 revisions to the upside in the past 30 days and 2 revisions to the downside. In this case though, thata™s enough to advance by nearly 1.3% to the current Zacks Consensus Estimate of $6.41 per share. There have also been 6 upward revisions in the past 7 days.

Joy Global Beats, Provides Guidance

Joy Global Incorporation(Nasdaq: [ JOYG ]) reported adjusted earnings of $1.39 per share in the fourth quarter of fiscal 2010, comparedwith $1.20 per share in the fourth quarter of fiscal 2009. The results were 23 cents higher than the Zacks Consensus expectation of $1.16 for the quarter.

The fiscal 2010 adjusted earnings of Joy Globalwere $4.40 per share, compared with $4.41 in fiscal 2009. The results of the company were 24 cents higher than the Zacks Consensus expectation of $4.16 for the fiscal year.

Total Revenue

Joy Global reported net sales of $1,048.9 million in the fourth quarter of 2010 versus $963.5 million in the fourthquarter of 2009, reflecting a year-over-year growth of 8.9%. The growth was driven by higher contribution from theUnderground Mining MachineryandSurface Mining Equipmentsegments, while eliminations dragged down the total revenue marginally.

The actual results surpassed the Zacks Consensus forecast of $925 million for the fourth quarter.

Joy Global reported net sales of $3,524.3 million for 2010 versus $3,598.3 million reported in 2009, which reflected a decline of 2.1% year over year. The year-over-year decrease was due to lower contribution fromUnderground Mining Machinery, which was offset marginally by higher contribution from theSurface Mining Equipmentsegment.

The actual results for fiscal 2010 exceeded the Zacks Consensus expectation of $3,398 million by $126.3 million.

Fourth Quarter Highlights

During the fourth quarter bookings at Joy Global touched $1 billion, which reflected a growth of 48% from the comparable period last year. During the quarter, original equipment orders doubled while aftermarket orders improved 21% from the previous yeara™s comparable quarter.

Underground original equipment orders improved due to increased orders for longwall and room and pillar equipment in the United States and Australia while orders for Surface business original equipment were driven by demand for electric mining shovels received from North America and Russia.

Underground aftermarket equipment business improved, led by demand for machine rebuilds and parts in the United States and South Africa, while surface aftermarket business improved mainly due to orders from Canada.

Joy Global's operating profit in the quarter under review was $227 million versus $184 million in the year-ago period reflecting a year-over-year growth of 23.4%. The bullish growth was due to the positive impact from aftermarket sales, lower material input costs and pricing realization.

Interest expenses during the quarter were $3.9 million, down from $5.3 million reported in the comparable quarter last year. The improvement resulted from lower long-term debt of the company.

Fiscal 2010 Highlights

The marginal decline in total sales in 2010 did not have any impact on the company's bookings. Joy Global registered a 39% increase in bookings for its products from fiscal 2009 levels. The improvement in bookings was driven by complete longwall system order from China, strong growth in the North and South American copper and coal markets, and aftermarket growth in most regions.

Joy Global's operating profit in fiscal 2010 was $697.1 million versus $702.3 million in the year-ago period reflecting a year-over-year decline of 3.3%. Lower sales volumes plus the increased retiree benefit plan expenses of $36 million offset somewhat by higher price realization and lower material input costs resulted in the overall decline.

Net interest expense in 2010 was $17 million versus $25 million in 2009. The 32% decline in interest expenses was attributable to interest earned by Joy Global on higher cash balances.

Financial Condition

Cash and cash equivalents of Joy Global as of October 29, 2010, were $815.6 million versus $471.7 million as of October 30, 2009.

Cash provided by operating activities during 2010 was $583 million and compared favorably with $451.9 million provided during the previous year. The year-over-year growth was driven by the increases in customer advance payments and accounts payable, partially offset by increases in accounts receivable.

Capital expenditure at Joy Global for 2010 was $73 million, lower by $21 million from the previous year. The decrease was the fallout of a delay in restarting capital projects earlier put on hold.

Guidance

Joy Global expects to sustain its strong performance in 2011. Revenue is expected to range from $3.9 billion to $4.1 billion for 2011. The company expects full-year 2011 earnings per share to range between $5.00 and $5.30.

Our View

We are encouraged by the positive long-term fundamentals of the mining industry and improving conditions in the U.S., China and India, which will likely trigger greater demand for mining equipment going forward. We appreciate Joy Globala™s move to incrementally increase its capital investment in 2011 and generate additional capacity to tap the increasing demand for mining products.

One of Joy Global's closest peers,Caterpillar Inc.(NYSE: [ CAT ]), ended the third quarter on a high note with earnings per share of $1.22 per share, which surpassed both the year-ago quarter results of 64 cents andthe ZacksConsensus Estimate of $1.09 per share.

Joy Global currently retains a Zacks #2 Rank (short-term Buy rating).

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