COLUMBUS, Ind. — Cummins has reported record revenues and higher earnings for the third quarter, led by quarterly-best sales in three of its four business segments. Cummins officials say the company is on pace to meet its earnings guidance of $7.15-$7.65 a share, which would make 2007 the most profitable year in company history.
Sales grew 20% to $3.37 billion, from $2.81 billion during the same period in 2006, eclipsing the company’s previous high mark set in the second quarter of 2007. Net income for the third quarter increased 7.6% to $184 million, or $1.84 per diluted share, from $171 million, or $1.69 per diluted share in the third quarter last year.
Earnings Before Interest and Taxes (EBIT) rose 3.4% to $306 million, or 9.1% of sales, from $296 million, or 10.5% of sales, in the same period in 2006. Earnings growth was moderated by a downturn at some OEM customers, and the expected higher costs associated with the introduction of new emissions-related products.
“We continue to experience significant growth in most of our markets around the world, and are well-positioned to take advantage of many opportunities for future growth,” said Cummins CEO, Tim Solso. “Our technology leadership has resulted in a sustainable competitive advantage for Cummins, and we remain focused on producing profitable growth for all our stakeholders.”
In the company’s engine business, gains in many markets most notably in the light-duty automotive, medium-duty truck, construction and mining markets propelled the segment to a 17% sales increase compared to the same period last year. That increase came despite continued weakness in the North America heavy-duty truck engine market related to emission regulation changes.
The industry forecast for trucks in that market is now approximately 180,000 units for the full year 2007, down almost 50% from 2006.
Even though this market is down significantly from the prior year, Cummins held a market-leading 36% share of the North America Class 8 truck engine market, compared to 27% at the end of 2006.
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