Cummins Inc. last week reported that both third-quarter sales and profits increased sharply from the same period a year ago. Sales of $3.40 billion in the third quarter rose 34 percent from $2.53 billion in the same quarter in 2009. Net income attributable to Cummins Inc. in the third quarter tripled to $283 million, or $1.44 a share, compared to $95 million, or $0.48 a share, in the same period a year ago. The company’s continued strong performance in international markets was a primary driver of the improved results.
Earnings Before Interest and Taxes was $449 million, or 13.2 percent of sales, up from $177 million or 7.0 percent of sales, excluding restructuring charges, in the third quarter of 2009.
The company’s third-quarter results include a pre-tax benefit of $32 million ($21 million after-tax, or $0.11 share) related to a favorable legal ruling in Brazil on the tax treatment of imports during the period 2004-2008.
The sales gains were led by the company’s Engine and Power Generation segments, which each reported 44-percent sales improvements compared to the same period in 2009. Distribution sales increased 36 percent, while Components sales rose 30 percent.
The Engine segment reported its best EBIT percentage in company history at 10.8 percent of sales, despite continued weakness in the North American truck engine markets related to EPA emissions changes and slow economic recovery in the United States.
“Our products continue to perform well in the market and our 2010 engine launch in North America has gone extremely well,” said Tom Linebarger, Cummins president and chief operating officer. “We have sold nearly 37,000 medium- and heavy-duty engines in North America this year, and the customer feedback we have received indicates that the engines are delivering on our promise of reliability and improved fuel economy.”
Based on the company’s performance so far this year and its forecast for the fourth quarter, Cummins raised its full-year financial guidance to an EBIT of 12.5 percent of sales on revenues of $13 billion.
“We continued to build on our strong performance this year with an outstanding third quarter,” said Cummins chairman and CEO Tim Solso. “Our strength in large international markets provided significant benefits to the company and we continue to see productivity improvements in our manufacturing operations.”
Sales in the company’s non- U.S. markets increased 56 percent from the third quarter 2009 and accounted for 63 percent of Cummins’ consolidated revenues, consistent with the first two quarters of the year.
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.
