Columbus-based Cummins Inc. (NYSE: CMI) is reporting second quarter net income of $446 million, compared to $414 million for the same period last year. The engine manufacturer has also increased its revenue forecast. Chief Executive Officer Tom Linebarger says the company is making gains in multiple North American markets. July 28, 2014
COLUMBUS, Ind. – Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2014.
Second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America.
Revenues in North America increased 14 percent while international sales decreased 1 percent compared to the second quarter a year ago. Within international markets, lower revenues in Mexico, Brazil and India offset stronger demand in China.
Earnings before interest and taxes (EBIT) were $657 million for the second quarter or 13.6 percent of sales. This compares to $621 million or 13.7 percent of sales a year ago.
Net income attributable to Cummins in the second quarter was $446 million ($2.43 per diluted share), compared to $414 million ($2.20 per diluted share) in the second quarter of 2013.
“Demand is growing in on-highway markets in North America this year as the economy improves and we have gained market share in medium duty truck and bus markets. Our Components business delivered very strong results in the second quarter generating record sales and profits,” said Chairman and CEO Tom Linebarger. “Earlier this month we raised the quarterly dividend by 25 percent and the Board of Directors also approved a new $1 billion share repurchase program, consistent with our commitment to return 50 percent of operating cash flow to shareholders and reflecting our confidence in the Company's future.”
Based on the current forecast, Cummins expects full year 2014 revenues to grow between 8 percent and 11 percent, up from its previous forecast of growth of between 6 percent and 10 percent, due largely to improving demand in North America. EBIT is expected to be in the range of 12.75 to 13.25 percent of sales.
Other recent highlights:
The Company named Rich Freeland as President and Chief Operating Officer
Cummins was named 2013 Powertrain Supplier of the Year by Chrysler Group
The Company was ranked among the World's Best in Newsweek's 2014 Green Rankings for our continuous efforts to reduce our environmental footprint and make a positive impact on the environment
For the ninth straight year Cummins was awarded a perfect score by the Human Rights Campaign Foundation (HRC) in the 2014 Corporate Quality Index as part of HRC's Best Place to Work Initiative
Second quarter 2014 detail (all comparisons to same period in 2013)
Sales – $2.7 billion, up 3 percent
Segment EBIT – $311 million, or 11.3 percent of sales, compared to $339 million or 12.8 percent of sales
Increased demand in on-highway markets in North America offset weakness in global power generation and the Brazilian truck market
Sales – $1.3 billion, up 15 percent
Segment EBIT – $185 million, or 14.5 percent of sales, compared to $136 million or 12.2 percent of sales
Higher demand in on-highway markets in North America, Europe and China more than offset weaker demand in Brazil
Power Generation Segment
Sales – $743 million, down 9 percent
Segment EBIT – $61 million, or 8.2 percent of sales, compared to $76 million or 9.3 percent of sales
Lower revenues in most markets particularly North America, Asia Pacific and Middle East offset stronger demand in China and Africa
Sales – $1.2 billion, up 30 percent overall and up 2 percent excluding acquisitions
Segment EBIT – $126 million, or 10.2 percent of sales, compared to $100 million or 10.5 percent of sales
Higher revenues were primarily driven by acquisitions and stronger demand in North America and Africa.
Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins currently employs approximately 48,000 people worldwide and serves customers in approximately 190 countries and territories through a network of approximately 600 company-owned and independent distributor locations and approximately 6,800 dealer locations. Cummins earned $1.48 billion on sales of $17.3 billion in 2013. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at @Cummins and on YouTube at CumminsInc.