Joy Global, Inc. (JOYG: chart), a manufacturer of mining equipment, announced Q2 earnings of 66 cents per share an increase of 19% over 31 cents per share in the year-earlier period. The company’s income grew from $83 million compared with $39 million a year ago. Total revenues for Q2 were $560 million compared to $472.5 million a year earlier. Analysts had been expecting earnings of 53 cents per share on revenue of $595.6 million. The increase in revenue, at 65% of the total quarterly revenues compared to 62% last year, was accredited to aftermarket parts and services revenues which rose 24% over the year-earlier period. Original equipment orders in Q2, however, declined in total by 33%, in particular for new capacity mining systems.

Gross margins rose to 33% from 29% of sales in the year-ago period due in part to the stronger aftermarket mix. Operating leverage saw an incremental profitability of more than 50% for the company in total. The company believes this was due to a combination of factors, including the higher percentage of aftermarket revenues and a favorable product mix of original equipment, combined with a favorable recovery of manufacturing expenses and stringent control of overhead costs.

Product development, selling and administration expenses were 14% of sales, totaling $78 million, compared to 16%, totaling $73 million last year. The expenses included in the quarter were higher pension expenses and increased program spending at P&H Mining. The expenses were partially offset by lower legal costs than in the year-ago period. The company expects to maintain its range of 25% to 30% operating leverage in future quarters.

The company stock price has traded between $22.20 and $71.68 in the last 52 weeks. The stock declined $5.33 to trade at $48.99 in the late afternoon trading.

Other income in Q2 totaled $4 million, which included $3 million of gains from the sale of assets, and was up from $1 million a year ago. Income from reorganization totaled $5.1 million in comparison to $2.4 million last year. Anticipated in future quarters is a limited additional reorganization income. Interest income totaled $1.3 million compared with interest expense of $3.5 million in the year-earlier period.

The company entered into an agreement to acquire the net assets of the Stamler mining equipment business from the Oldenburg Group for a purchase price of approximately $118 million, which the intent to do so had already been previously announced. Stampler business is expected to have revenues of approximately $150 million in fiscal year of 2006. The company anticipates a closing before the end of Q3.

While the company did not give any guidance for Q3, it did give 12 month guidance on revenues of a range of 14% to 23%. This would result in total revenues in the range of $2.5 billion to $2.7 billion. Guidance on operating profits is expected to be in the range of 25% to 30% of each additional dollar of revenue. The company expects operating profits to be in the range of $440 million to $490 million, and expects margins to improve. Per share guidance is expected to be in the range of $2.40 to $2.70, which includes approximately 10 cents per share from a lower effective book tax rate, before any additional tax valuation reserve reversals.

As part of a $300 million dollar stock repurchase authorization, 420,000 shares of stock were repurchased in Q2 at an average cost of $56 a share. As of the end of the quarter, the company has purchased an additional 800,000 shares repurchased under the program to a total of more than 1.5 million shares.