SOURCE: Rothman Research

Rothman Research

March 11, 2010 09:35 ET

Monster Machinery Firms Have Positive Outlook for 2010

JOHANNESBURG, SOUTH AFRICA--(Marketwire - March 11, 2010) -

Farm and construction machinery industry have seen deflating performances in the first quarter of 2010, but many of the main players and analysts continue to have a positive outlook on the sector. "We have seen a minor pull back within the industry at times as questions regarding the strength and sustainability of the economic recovery worldwide has been on top of everyone's head. Even if we have reserved doubts that the United States is going to return to robust growth in the near-term, we do believe the uptrend will continue in the farm & construction machinery industry," says analyst, Mathew Collier of He believes that the deflationary policies that are starting to take effect around the world and a weak dollar will benefit the sector.

Leading online research firm probes into two of the key players within the industrial machinery industry -- Joy Global Inc. (NASDAQ: JOYG) and Terex Corporation (NYSE: TEX).

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Joy Global Inc. -- engages in the manufacture and servicing of mining equipment for the extraction of coal, copper, iron ore, oil sands, and other minerals worldwide. The company operates in three segments: Underground Mining Machinery, Surface Mining Equipment, and Continental Crushing and Conveying.

Joy Global had a stronger-than-expected fourth-quarter 2009 results. While revenues declined 3% year-over-year to $729 million, new order bookings improved 22%, largely driven by a 303% development in original equipment orders. Net sales in the first quarter of 2010 were $729.2 million, a decrease of $25.7 million or 3.4% from the prior year, which includes an $8.5 million increase in aftermarket sales and a $34.2 million decrease in original equipment sales. According to the company's outlook, "we expect 2010 to be a year of improving order rates. Based on planning meetings with our customers regarding machine specifications and delivery schedules, we expect that the strongest equipment demand will come from copper, international coal and iron ore, and that orders will come predominately from North and South America, Asia and Africa."

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Terex Corporation -- manufactures machinery products, equipments, and related replacement parts and components for the construction, infrastructure, quarrying, shipping, transportation, power, and energy industries, with a market value of about $2.3 billion.

For the full year 2009, the Company reported a net loss of $450.7 million, or $4.39 per share, compared to a net loss of $74.0 million, or $0.74 per share, for the full year 2008. Terex obtained pre-tax charges of approximately $27 million associated with restructuring programs and a continued reduction in production levels. Net sales were $4.04 billion in 2009, declined 51.8% from $8.39 billion in 2008. Despite the company's losses, Terex CEO is positive for the outcome of the company this year. "We have built a company that is both geographically and product diverse, but virtually no part of our business has weathered these market conditions unscathed. Fortunately, we see signs that certain markets have stabilized, and even a few signs that point to growth," says CEO Ron DeFeo. Investors and analysts are looking closely into this stock with magnifying lenses.

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