Cummins Inc. this week reported record profits for all of 2010, as well as record quarterly sales and profits for the fourth quarter, on the strength of significant growth in key international markets and improved productivity in its global manufacturing operations.
Fourth-quarter sales were $4.14 billion, up 22 percent from $3.40 billion during the same period in 2009. Earnings Before Interest and taxes were $541 million, or 13.1 percent of sales, a 41-percent increase from $383 million, or 11.3 percent of sales. The fourth-quarter 2009 results include a pre-tax charge of $4 million to cover the costs associated with restructuring.
Net income attributable to Cummins Inc. was $362 million ($1.84 per share) compared to $270 million ($1.36 per share) in the fourth quarter 2009.
For the fourth quarter, the Engine, Components and Distribution segments all reported record sales and segment EBIT. The Power Generation segment, which was affected by the recession later than the company’s other business segments, continued to rebound and reported strongly higher sales and segment EBIT than during the same period in 2009.
For the full year, sales were $13.23 billion, up 22 percent from $10.80 billion in 2009. EBIT of $1.66 billion, or 12.5 percent of sales, increased 114 percent from $774 million, or 7.2 percent of sales excluding restructuring and other charges, in 2009.
Full-year 2010 sales were second only to 2008, while EBIT and net income attributable to Cummins Inc. were company records. Three of the company’s four business segments — Engine, Components and Distribution — reported full-year record earnings, while Power Generation also posted strong sales and profit gains from the previous year.
The company’s strong performance in 2010 came despite a significant decline in its North American truck engine markets, which were affected by the continued weakness in the U.S. economy and a change in emissions standards. Engine shipments to the North American heavy-duty truck market fell 61 percent and 44 percent to the North American medium-duty truck and bus markets.
Those decreases were more than offset by growth in international markets, particularly China, India and Brazil, and the company continues to benefit from actions taken over the past two years to improve the productivity of its manufacturing operations around the world.
Sales in China and Brazil increased by more than 70 percent, while sales in India rose 37 percent for the year. Cummins’ total international sales increased by 48 percent from 2009 and accounted for 64 percent of the company’s total sales in 2010.
“2010 was the best year in the company’s history,” said Tim Solso, chairman and CEO. “The fact that we were able to achieve record profitability in the face of a sharp decline in large North American on-highway markets speaks to the global strength of our business and the work we did to keep the company strong during the recession.”
Based on its current forecasts, Cummins expects sales to grow to $16 billion in 2011 and EBIT to be 13.5 percent of sales.
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.