Cummins Inc. last week reported its fourth straight year of record financial performance, with sales for the year rising 15 percent to $13.05 billion, compared with $11.36 billion in 2006, a 14.8-percent jump. Net income rose to $739 million, or $3.70 per share, a 3-percent increase compared to $715 million or $3.55 per share in 2006. EBITDA was $1.23 billion, or 9.4 percent of sales, a 4-percent jump from 2006, when the company earned $1.18 billion, 10.4 percent of sales.
The record results came despite the expected significant drop in the North American heavy-duty truck market as a result of emissions changes that took effect Jan. 1, 2007. Industry-wide sales in that market declined nearly 50 percent in 2007, but Cummins increased share as well as strong growth across most of the company’s businesses and regions.
Cummins fourth-quarter sales of $3.5 billion were a quarterly best for the company and were 16-percent higher than the same period in 2006. The company’s strong performance in the fourth quarter was led by gains in the power generation and distribution segments, although all four of the company’s operating segments — engine, power generation, distribution and components — reported record sales for the fourth quarter and all of 2007.
Although revenues were higher in the Engines segment, profits were lower for both the fourth quarter and the full year because of costs associated with the release of new products in North America to meet the 2007 EPA emissions regulations.
Cummins expects 2008 sales to increase 12 percent compared with 2007, and the company expects to generate EBIT of 10 percent of sales in 2008.
Cummins is based in Columbus, Ind.
