Cummins Inc. last week reported sharply higher sales and earnings compared to the first quarter of 2010 on continued strength in key international markets, a recovering North American truck market and productivity improvements. First-quarter sales of $3.9 billion were up 56 percent from $2.5 billion in the same period in 2010. Earnings before interest and taxes were $532 million or 13.8 percent of sales, double the company’s earnings from the same period a year ago. EBIT as a percentage of sales in the first quarter was at its highest level in at least 25 years.
Net income attributable to Cummins Inc. was $343 million ($1.75 per share) compared to $149 million (75 cents per share) in the first quarter of 2010.
“Our outstanding first-quarter results demonstrate that we are well positioned to take advantage of our significant growth opportunities as markets around the world continue to recover,” said Tim Solso, chairman and CEO. “The work we have done over the past two years to keep the company strong during the global economic recession is paying off today.”
As a result of the company’s performance in the first quarter and its forecast for the remainder of the year, Cummins increased both its EBIT and sales guidance for 2011. The company now expects to earn 14 percent EBIT on $17 billion in sales in 2011.
Engine segment sales of $2.4 billion were up 68 percent compared to the same quarter a year ago, which was artificially weak because of a change in emissions standards and the economic downturn. Segment EBIT of $290 million, or 12.1 percent of sales, was a quarterly record.
Engine shipments in the global heavy-duty truck market more than tripled year-over-year, while medium-duty truck engine shipments increased 114 percent. In addition, shipments to global industrial markets such as construction (up 60 percent) and mining (up 59 percent) also were strong.
Sales in the Components segment, propelled by recovery in Europe, growth in China and India, and higher content of emission controls products on engines in North America, were up 47 percent to a record $924 million. Segment EBIT of $105 million, or 11.4 percent, also was a quarterly record for the Components group.
Power Generation sales increased 54 percent to $795 million on the strength of improved sales in its commercial products. Total segment sales in Western Europe increased 88 percent; 81 percent in the Middle East and 47 percent in India. Segment EBIT was $89 million, or 11.2 percent of sales.
The company’s non-U.S. markets continued showing strong growth as sales were up in every major international region compared to the same period last year. Consolidated sales in China were up 66 percent; India 31 percent; Brazil 39 percent; Africa and Middle East 40 percent. Sales outside the United States accounted for 61 percent of the company’s revenue in the quarter.
“Our first-quarter results reflect strong growth in demand for our products across most of our markets,” said Tom Linebarger, Cummins president and chief operating officer. “We expect the growth to continue and are investing significantly in the additional capacity needed to serve our customers around the world.”
Headquartered in Columbus, Ind., Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.
