Cummins’ 1Q Profit Rises on Higher North American Engine Sales
Engine maker Cummins Inc. said first-quarter profit rose on higher engine sales in North America.
Net income rose to $387 million, or $2.14 per share, up from $338 million, or $1.83, a year ago. Revenue rose 7% to $4.7 billion, Columbus, Indiana-based Cummins reported April 28.
The revenue gain was “driven by stronger demand in on-highway markets and distributor acquisitions in North America,” the company said, with North America revenue up 17% and international sales down 6%.
Lower revenue in Europe and Brazil more than offset growth in China, and currency exchange rates, primarily due to a stronger U.S. dollar, lowered revenue by 3% year-over-year.
Engine sales rose 1% to $2.6 billion, while segment earnings before interest and taxes was $253 million, or 9.7% of sales, compared with $269 million, or 10.5%, a year ago.
Higher demand in on-highway markets in North America and power generation offset weaker demand in construction, marine and mining markets, Cummins said.
Components sales rose 6% to $1.3 billion, while segment EBIT rose to $195 million from $167 million a year ago on stronger demand in on-highway markets in North America and China.
Cummins said it expects 2015 revenue to grow between 2% and 4%, with EBIT in the range of 13.5% to 14% of sales.
“We expect profitability for the remainder of the year to increase from first-quarter levels as revenues improve and we capture more benefits from cost-reduction activities,” Chairman and CEO Tom Linebarger said in a statement.
