Cummins scores record high in second quarter results

Cummins Corporation announced recently that thanks to the strong growth in most of the world's markets, the company's sales and revenues in the second quarter of 2011 reached new highs. The engine, parts and components sales divisions refreshed their sales and revenue records.

Cummins's second-quarter sales reached US$4.6 billion, a year-on-year increase of 45%; EBIT was US$775 million, including US$68 million in profit from the sale of Nelson’s exhaust products business by the Components Division. If this item is deducted, the company's EBITDA is US$707 million, accounting for 15.2% of sales. The quarterly profit and profit rate both set the best history.

Cummins' net income for the second quarter was $505 million, and diluted earnings per share reached $2.60. If Cuscoe subtracts US$68 million from the sale of its exhaust business, Cummins’ earnings per share are US$2.41 (US$1.25 in the same period of last year).

“The brilliant performance of Cummins in the second quarter proved once again that our long-term strategy for diversification and profitable growth in the international market and end-use markets has been a success,” said Tim Solso, Cummins Chairman and Chief Executive Officer. Cummins is now facing the best global growth opportunities. This is the result of our efforts over the past decade."

Based on the company's outstanding performance in the second quarter and the outlook for the second half of the year, Cummins raised its 2011 full-year sales and EBIT forecast. The company expects global sales revenue to be US$18 billion and EBIT margin of 14.5%. This expected value does not include any revenue from the sale of the business.

Due to the rapid growth of the global truck market and non-road markets including mines and oil and gas fields, the engine division's sales for the quarter increased by 53% year-on-year to US$2.9 billion. Earnings before interest and taxes reached 377 million U.S. dollars, yielding 13%.

Cummins' engine products that meet the EPA 2010 emissions standards of the US Federal Environmental Protection Agency continue to perform well in terms of reliability and fuel economy. In the North American market, Cummins has delivered 126,000 medium-to-heavy engines equipped with selective catalytic reduction aftertreatment devices to truck and bus users.

Thanks to the recovery of the road market in North America, the Cummins Parts Business Division's quarterly sales exceeded US$1 billion for the first time, a year-on-year increase of 42%, and EBIT's pre-tax profits reached a record US$120 million, with a profit margin of 11.6%. The gains from the sale of the exhaust business are not included in the performance statistics of the division.

Huge demand for oil and gas fields, mines, and the electricity market generated $785 million in sales for the Distribution Division, a year-on-year increase of 36%. The EBIT was US$106 million, achieving a 13.5% profit margin and creating a new quarterly record.

Cummins Power's sales in the second quarter were US$909 million, a year-on-year increase of 28%, of which sales in the United States, Europe and China were the most attractive. The quarterly profit before interest and tax amounted to US$105 million, and the profit rate was 11.6%.

The Cummins International Market continued its strong growth momentum, setting new sales records in the Brazilian, Indian and Chinese markets.

"I have great confidence in Cummings' future." Cummins president and chief operating officer Lan Bowen said, “In most markets, customers around the world have very strong demand for Cummins products. Our products perform well, occupy a leading position in the market, and the most valuable is that All our business units have created gratifying benefits."