Cummins Inc. last week reported strong sales and earnings for the third quarter. Year-over-year growth was driven by global mining and oil and gas markets, on-highway markets in North America and Brazil, and construction demand in Asia. Third-quarter sales were $4.6 billion, up 36 percent from the same period last year. All segments delivered double-digit growth over the prior year.
Earnings before interest and taxes were $640 million, or 13.8 percent of sales, compared to $449 million, or 13.2 percent of sales, in the same period in 2010.
Net income attributable to Cummins Inc. in the third quarter was $452 million, an increase of 60 percent from a year ago, or $2.35 per diluted share. This compares to $283 million or $1.44 per diluted share a year ago.
"We delivered strong performance in the third quarter and 2011 will be a record year for the company,” said Tom Linebarger, president and chief operating officer. "Many of our key markets continue to show strong growth, for example, mining, oil & gas, and North American on-highway markets. However, as discussed at our recent investor conference, there is some uncertainty around the macro-economic environment. Government actions to reduce inflation in India and China have resulted in softer near-term demand than we previously expected. This, along with the recent strengthening of the U.S. dollar, has caused us to slightly soften full-year revenue guidance to a range of $17.5 to $18 billion, which would represent an increase of over $4 billion or over 30 percent compared to 2010.”
The company now expects to deliver record profits of between 14 and 14.5 percent EBIT, compared to 12.5 percent in 2010. This guidance excludes gains from the sale of the exhaust and light-duty filtration businesses.
Engine segment sales of $2.96 billion were up 43 percent compared to the same quarter a year ago. This increase was driven by on-highway markets in North America and Latin America, strong worldwide oil and gas, mining and construction activity. Engine segment EBIT was $349 million, or 11.8 percent of sales.
Power Generation segment had sales of $874 million, a year-over-year increase of 10 percent. Improvements in China, North America, Europe and the Middle East offset weaker demand in India. Power Generation segment EBIT was $92 million or 10.5 percent of sales.
Headquartered in Columbus, Ind., 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.