Cummins Inc. last week reported its highest third quarter sales and profits ever and second best quarter in its history, led by strong gains internationally that offset continued weakness in the company’s North American consumer markets.
Third quarter sales were $3.69 billion, a 10 percent year-over-year increase compared to $3.37 billion in last year’s third quarter. Net income jumped 24 percent to $229 million, or $1.17 per share, compared to $184 million, or $0.92 per share in the year-ago period. EBIT increased 24 percent to $380 million, compared with $306 million a year ago.
All four of the Columbus, Ind.-based company’s business segments improved sales and segment EBIT. Power Generation and Distribution had the largest percentage sales gains year over year.
Non-U.S. sales accounted for 61 percent of Cummins’ revenues in the third quarter, compared with 52 percent a year ago, especially in the power generation segment, where sales grew 29 percent outside North America, and the distribution segment, where outside North America sales jumped 28 percent in the third quarter.
“Despite the significant challenges facing the U.S. economy and signs of economic weakness in Europe, the company performed extremely well in the third quarter,” said chairman and CEO Tim Solso. “Even more importantly, we continue to meet or exceed our profitability targets as we grow our sales. These results, which keep us on track for a fifth straight year of record financial performance, are further proof that our strategy of diversifying our product line and expanding our geographic customer base is working.
“While we expect the fourth quarter to bring more economic challenges – especially in the U.S. and Europe -- Cummins has never been better positioned to ride out a turbulent economy than it is today. Our debt is less than 15 percent of our total capital. We have healthy cash balances and our business operations continue to generate cash. We also have a $1.1 billion revolving credit line for additional liquidity.”
Other third quarter highlights include:
- Cummins improved its market share in the North American heavy-duty truck and bus markets;
- Cummins had strong international demand for its medium-duty truck engines, especially in Latin America;
- Cummins Power Generation experienced strong growth in China, India, the Middle East, India, Africa and Latin America;
- Sales of exhaust after-treatment products made by Cummins Emission Solutions showed strong growth, especially in North America;
- Joint venture income of $66 million is the highest ever for the third quarter.
- In the engine segment, sales of $2.28 billion were 6 percent higher than $2.15 billion in last year’s third quarter.
