Truck suppliers see strong bounce back

COLUMBUS, Ind. – Cummins overcame the weak North American market and reported that 2010 was its best year in history.

The engine manufacturers announced record quarterly sales and profits for the fourth quarter, on the strength of significant growth in key international markets and improved productivity in its global manufacturing operations.

Fourth quarter sales were $4.14 billion, up 22 percent from $3.40 billion during the same period in 2009.

For the full year, sales were $13.23 billion, up 22 percent from $10.80 billion in 2009.

The strong performance came despite a significant decline in its important North American truck engine markets, which were affected by the slow U.S. economy and the change in emissions standards that mandate more expensive, unproven engines.

Engine shipments to the North American heavy-duty truck market fell 61 percent and 44 percent to the North American medium-duty truck and bus markets.

Those decreases were more than offset by growth in international markets, particularly China, India and Brazil.

Sales in China and Brazil increased by more than 70 percent, while sales in India rose 37 percent for the year.

"2010 was the best year in the Company’s history," said Chairman and Chief Executive Officer Tim Solso. "The fact that we were able to achieve record profitability in the face of a sharp decline in large North American on-highway markets speaks to the global strength of our business and the work we did to keep the Company strong during the recession.

Another major global supplier to the trucking industry, ArvinMeritor (actually, it’s just Meritor now) reported that sales were $971 million, up $171 million or 21 percent, from the same period last year.

The increase was primarily due to stronger truck demand in all regions, including, the company says, some relative improvements in North America compared to the previous two years.

But compared to the fourth quarter of fiscal year 2010, sales in the first quarter of this year were essentially flat.

The Aftermarket & Trailer segment posted sales of $225 million, up $3 million from the same period last year.

"As we anticipated, commercial truck sales in North America are increasing rapidly, while truck sales in other markets around the world continue to strengthen. Higher sales, combined with a continued focus on controlling structural cost and executing growth initiatives are key to achieving our long-term 10 percent EBITDA margin target," said CEO Charles "Chip" McClure.
 


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