Joy Global (NASDAQ:JOYG) has had a heck of a run since late 2002, making anyone who bought shares before early 2005 joyful indeed. But mining is a fickle industry, and eventually, this boom in machinery purchasing will come to an end.

The end didn't occur during the company's 2005 fiscal second quarter. Sales were up 43%, and the company managed to nearly triple its operating income. Although the company again posted year-over-year improvements in margins, management suggested that further gross-margin improvement could prove difficult.

New orders were also positive in the quarter, climbing 17% to about $591 million. Although new orders in surface mining were pretty much flat, orders for Joy Mining (underground machinery) were up 32%. Joy Global also saw a 12% sequential improvement in backlog, and that figure stands at nearly $1 billion.

While business was still strong in this quarter, I'm expecting growth to be moderate though still stay positive. My hunch is that Joy Global saw a flood of orders in the recent past from miners who wanted to take advantage of what they feared was only a temporary spike in the prices of mined goods, using the strong cash flow they were getting to replace old machinery. If that hunch is accurate, Joy Global will still see more orders coming in, but the year-over-year comparisons will get tougher.

But Joy Global still has room to grow. In particular, I'd look for the company to begin looking for operating leverage and delivering a better cash-flow yield on its sales. Not only has the company tendered for some of its debt, but it's also looking to refinance other debt at better terms. Lastly, the board also approved a plan to spend up to $300 million on share repurchases over the next two years. At current prices, that would take out roughly 10% of the company's outstanding shares.

Though I expect to see some deceleration in Joy Global's growth, new mines are still being opened up around the world, and the average age of mining equipment in operation suggests that there is still time left in this upgrade/replacement cycle. As I've said before, I'd expect Joy Global to see a peak in capital equipment spending some time around 2007-2008.

Should the prices of coal and other mined products go on another upward jag, equipment providers like Joy Global will likely go along for the ride. Like oil drillers or construction stocks, though, this is a stock that needs to be bought carefully. But the joy might not be over just yet.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).