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No. of Recommendations: 5
Joy Global earnings are out this morning. Here's the link to the company release:

So quick takeaways are:

• While they missed estimates on both revenue and earnings, there was growth there with net income up 18% and revenue up 27%;
• Bookings were up nicely at 33% over last year with exceptional performance in the surface mining segment;
• Booking growth also benefitted from the acquisition of LeTourneau;
• Mining companies are increasing production and bringing new mines on line for work;
• Operating margin was up to 22.2% from 21.6%;

These are just a few of the bullets from the release. The stock is selling off in pre-market trading a little bit (slightly over 3% right now) and I know why. Destocking of materials has lowered demand for the short run. They are however seeing miners continue to increase capex for 2012 as it is anticipated that this destocking is near the end of its cycle which will push up demand a little further out. Spot prices on iron ore, copper and gold also support this notion.

China and India appear to be chugging along and will continue to play a big part. "China's 12th Five Year Plan calls for $840 billion U.S. dollars to be spent on investments in power generation and the electricity grid, and this will add support to long term commodity demand in China."

Management expects commodity demand to remain "sluggish" in the short term, over the longer term the restocking of historically low stockpiles will play out pushing up demand. CEO Sutherlin said: "We expect demand to grow at a more moderate rate in 2012, and our focus will be on long term growth and efficiencies."

Guidance for the new year is a range of $7.00 - $7.40 per share on revenue of $5.3 - $5.5 billion but note that this doesn't include the acquisiton of IMM; they will not include IMM until the acquisition is complete. From my original write-up: "Joy's recent acquisition of LeTourneau from Rowan Cos. along with additional market share gains from the strategic investment in International Mining Machinery Holdings in China should also add some fuel to the fire."

With analysts' inital expectations for fiscal 2012 pegged at $7.18 per share on $5.4 million in revenue, management's guidance falls within that range. The stock is selling off because the company missed estimates and they are offering a more conservative outlook on the immediate future. Not surprising at all there. I don't like playing the whole expectations's just not that important in the grand scheme of things. And I would much rather have them be conservative on their outlook, underpromise and overdeliver so I'm good with this report and the way things are going.

I opened this position at a really killer price, there's no denying that. With the way things are looking for the future, I think this could turn out to be a very solid performer.

Foolish best,

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