Columbus, Ind.-based Cummins Inc. this week reported record sales and earnings for the second quarter of 2011 on strong growth in nearly every global market. Second-quarter sales were $4.6 billion, up 45 percent from the same period last year. Earnings before interest and taxes (EBIT) were $775 million and included a $68 million gain on the sale of the exhaust business from its Components segment. Excluding the gain from the sale of the exhaust business, EBIT was $707 million, or 15.2 percent of sales, the highest level and percent of sales the company has reported in any quarterly period in its history. The company’s Engine, Components and Distribution segments each delivered record sales and earnings.
Net income attributable to Cummins Inc. in the second quarter was $505 million or $2.60 per diluted share. Excluding the $68 million gain ($37 million after tax or $0.19 per share), the company reported earnings of $2.41 per share compared to $1.25 per share in the second quarter of 2010.
"The company's performance in the second quarter underscores the success of our long-term strategy to diversify and seek profitable growth across geographies and end markets," said Tim Solso, chairman and CEO. "As a result of our efforts over the last 10 years, Cummins is better positioned than ever to grow in this global economy."
As a result of the company’s performance in the quarter and its outlook for the remainder of the year, Cummins increased both its sales and EBIT forecast for 2011. It now expects to earn 14.5 percent EBIT on $18 billion in sales in 2011. This forecast excludes any current or future gains from the sale of businesses.
Engine segment sales of $2.9 billion were up 53 percent compared to the same quarter a year ago. They were driven by strong growth in global truck markets and off-highway markets including mining and oil and gas.
Cummins’ Power Generation segment had sales of $909 million, a year-over-year increase of 28 percent, while segment EBIT was $105 million or 11.6 percent of sales. Revenue growth was strongest in the U.S., Europe and China.
The company’s non- U.S. markets continued to show strong growth and Cummins had record sales in Brazil, India and China.
“I am very optimistic about Cummins’ future,” said Tom Linebarger, president and chief operating officer. “We are experiencing strong global demand in most of our markets. Our products are performing very well, we have strong leadership positions, and we are delivering strong profitability in all four businesses.”
Cummins Inc. manufactures, distributes and services engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.