Cummins Q1 Revenue Falls 12 Percent on Slowing Engine Business

Cummins Inc. this week reported results for the first quarter of 2013. Revenues in the quarter were $3.9 billion, a 12-percent decrease from the first quarter of 2012. Revenues in North America declined by 15 percent and international revenues declined by 10 percent as the company experienced weaker demand in most major geographies and end markets.

Earnings before interest and taxes (EBIT) were $437 million or 11.1 percent of sales, compared to $658 million or 14.7 percent of sales a year ago.

Net income attributable to Cummins in the first quarter was $282 million ($1.49 per diluted share), compared to $455 million ($2.38 per diluted share) in the first quarter of 2012.

The most significant decline in demand occurred within the Engine Business, with total unit volumes down 18 percent year-over-year. Shipments of high-horsepower engines declined by 24 percent because of weakness in mining, oil and gas and power generation markets.

“As anticipated, we experienced weak demand in the first quarter in many of our major markets,” said Tom Linebarger, chairman and CEO. “While uncertainty remains in a number of markets, we expect that the first quarter will mark the low point of the year for company revenues. We expect moderately improving order trends in on-highway and construction markets in North America to be the most significant drivers of improvement in revenues going forward. We continue to make investments in our distribution system and in new products as we remain focused on future profitable growth.”

Based on the current forecast, the company expects full-year revenues to be flat to down 5 percent and EBIT to be in the range of 13 to 14 percent of sales.

Headquartered in Columbus, Ind., Cummins Inc. designs, manufactures, distributes and services diesel and natural gas engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.