Cummins’ Engine Business “Dramatically Improved”
Cummins Inc., the primary supplier of diesel engines to the motorhome sector, reports its engine business “dramatically improved” in 2002 despite a fourth-quarter loss.
However, the company, also a supplier of Onan generators, reports its power generation business unit incurred a loss of $27 million before interest expenses and income taxes during 2002.
Cummins’ power generation business earned $81 million before interest and taxes in 2001.
Power generation lost money because of “a severe drop in its principal markets,” according to Cummins. Consequently, the power generation business now is “undergoing a wide-ranging and aggressive cost-reduction effort to drive improvement in its results, even in the midst of a downturn in its markets.”
Meanwhile, Cummins’ engine business went in the oppose direction, earning $28 million before interest and taxes in 2002, compared with a $91 million loss before interest and taxes in 2001.
The engine business incurred a loss during the fourth quarter “due to the significant drop in demand in many markets following the Oct. 1 emission standards change in the U.S.,” Cummins reported.
Cummins’ sales of light-duty auto and RV engines increased 50% in the fourth quarter to $209 million largely because of strong demand for its engines for Dodge Ram pickups.
For all of 2002, Cummins’ light-duty auto and RV engine sales increased 36% to $781 million.
Cummins’ total engine sales increased by 10%, or $314 million, in 2002 to $3.44 billion. The light duty auto and RV segment contributed $205 million of the $314 million engine sales increase in 2002.