Columbus-based Cummins Inc. (NYSE: CMI) is reporting first quarter net income of $387 million, compared to $338 million a year earlier. Chief Executive Officer Tom Linebarger says the results were boosted by record performance in the company's components segment and he expects the manufacturer's profitability to increase for the rest of the year. April 28, 2015
COLUMBUS, Ind. – Cummins Inc. (NYSE: CMI) today reported results for the first quarter of 2015.
First quarter revenue of $4.7 billion increased 7 percent from the same quarter in 2014. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America. Currency negatively impacted revenues by 3 percent compared to last year, primarily due to a stronger US dollar.
Revenues in North America increased 17 percent while international sales declined by 6 percent. Within international markets, lower revenues in Europe and Brazil more than offset growth in China.
Earnings before interest and taxes (EBIT) increased to $562 million for the first quarter or 11.9 percent of sales, up from $528 million or 12.0 percent of sales a year ago.
Net income attributable to Cummins grew 14 percent in the first quarter to $387 million ($2.14 per diluted share), compared to $338 million ($1.83 per diluted share) in the first quarter of 2014. The tax rate in the first quarter of 2015, including discrete items, was 26.3 percent.
“Record profitability in our Components Segment, execution of our distributor acquisition strategy, the successful launch of new products in China and improved results in our Power Generation Business all contributed to earnings growth in the first quarter. Strong performance in these areas more than offset the impact of weak demand in a number of international markets.” said Cummins Chairman and CEO Tom Linebarger. “We expect profitability for the remainder of the year to increase from first quarter levels as revenues improve and we capture more benefits from cost reduction activities. During the quarter, we returned $277 million to shareholders in the form of dividends and share repurchase, consistent with our plans to return 50 percent of full year operating cash flow.”
Based on the current forecast, Cummins expects full year 2015 revenues to grow between 2 and 4 percent, and EBIT to be in the range of 13.5 to 14.0 percent of sales.
Other recent highlights:
For the eighth consecutive year, Cummins was named one of the world's most ethical companies by The Ethisphere Institute
Forbes magazine named Cummins 21st in its Top 25 Employers in America list
Cummins was selected by Halliburton as the engine supplier for the first EPA Tier 4 Final-compliant fracking spread in North America
The Company repurchased one million shares in the first quarter
First quarter 2015 detail (all comparisons to same period in 2014)
Sales – $2.6 billion, up 1 percent
Segment EBIT – $253 million, or 9.7 percent of sales, compared to $269 million or 10.5 percent of sales
Increased demand in on-highway markets in North America and power generation offset weaker demand in construction, marine and mining markets
Sales – $1.5 billion, up 55 percent overall and down 2 percent excluding acquisitions
Segment EBIT – $88 million, or 6.0 percent of sales, compared to $76 million or 8.0 percent of sales
Higher revenues were primarily driven by acquisitions and stronger demand in Asia Pacific, partially offset by the negative impact of currency movements
Segment EBIT included $8m of amortization of intangibles related to prior year acquisitions
Sales – $1.3 billion, up 6 percent
Segment EBIT – $195 million, or 15.0 percent of sales, compared to $167 million or 13.6 percent of sales
Stronger demand in on-highway markets in North America and China
Power Generation Segment
Sales – $680 million, up 6 percent
Segment EBIT – $49 million, or 7.2 percent of sales, compared to $25 million or 3.9 percent of sales
Higher revenues in Asia, Africa and the Middle East more than offset weaker demand in Eastern Europe
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 54,600 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 7,200 dealer locations. Cummins earned $1.65 billion on sales of $19.2 billion in 2014. Press releases can be found on the Web at www.cummins.com. Follow Cummins on Twitter at www.twittter.com/cummins and on YouTube at www.youtube.com/cummininc.
Source: Cummins Inc.