Columbus, Ind.-based Cummins Inc. last week reported record sales and earnings for the fourth quarter and all of 2006, marking the third consecutive year of record financial performance for the company.
Cummins eclipsed $3 billion in quarterly sales for the first time during the fourth quarter. All four of the company’s operating segments posted record revenues, and Cummins’ power generation and distribution businesses reported record segment earnings before interest and taxes in the fourth quarter, as well as for the entire year.
For the full year, Cummins reported sales of $11.4 billion, up 15 percent from $9.9 billion in 2005. EBIT of $1.2 billion (10.4 percent of sales) increased 30 percent over $907 million (9.1 percent of sales) in 2005.
Net earnings rose 30 percent to $715 million, or $14.21 per diluted share, from $550 million, or $11.01 per diluted share, the previous year.
In the fourth quarter, Cummins reported sales of $3.0 billion, a 10-percent increase from $2.8 billion in the same period in 2005. EBIT rose 13 percent to $303 million from $269 million.
Net earnings in the fourth quarter increased 13 percent to $189 million, or $3.75 per diluted share, from $167 million, or $3.31 per diluted share, in the fourth quarter of 2005. Gross margin for the quarter was 22.1 percent, down slightly from 22.5 percent for the fourth quarter of 2005.
The company’s power generation and distribution businesses performed at record levels in the fourth quarter — and for the entire year — while the engine segment reported near-record EBIT on its best-ever quarterly sales performance in the fourth quarter. Segment EBIT at the company’s components segment was essentially flat in the fourth quarter, compared to 2005.
“By almost every measure, 2006 was an outstanding year,” said Cummins chairman and CEO Tim Solso. “We continued to build on the success of the past two years even as we devoted significant time and resources to meeting the 2007 emissions changes in the United States.
“All of our business segments showed strong sales growth in 2006 and we gained share in key businesses and geographic markets around the world.”
In the engine segment, sales of $1.9 billion were a quarterly record and 6 percent higher than $1.8 billion during the same period in 2005. Segment EBIT increased 16 percent to $181 million from $156 million a year ago.
In the power generation segment, sales of $658 million rose 14 percent from $575 million, while segment EBIT increased 27 percent to $62 million from $49 million.
The company said it expects to earn between $11 and $11.50 a share in 2007, despite the forecasted emissions-related downturn in the North American heavy-duty truck engine market.
Cummins Inc. 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.