International Sales Boost Cummins 2Q Profits
Cummins Inc., a maker of engines and power generators, said its earnings in the second quarter rose 37% as strong international sales more than offset continued weakness in some of its key North American markets, including motorhomes.
Reuters reported that the Columbus, Ind.-based company also raised its full-year sales forecast, saying it now expects growth of 15%, up from a previous forecast of 12%.
Second-quarter net profit rose to $293 million from $214 million in the same period in 2007 and sales increased 16% to $3.89 billion.
Cummins said some of the sales growth came from strong sales of its commercial generators to customers in the developing world, including the Middle East, Latin America and China. It also reported strong sales of its turbochargers in North America, Europe and China.
Cummins said sales outside the United States accounted for 61% of its business during the quarter, up from 54% in all of 2007 and 57% in the 2008 first quarter.
Sales of its more consumer-related products in the United States tumbled during the quarter as falling home prices, tight credit markets and rising energy costs soured consumer confidence and kept buyers out of truck and motorhome showrooms.
Cummins said sales of diesel engines to Chrysler for the Dodge Ram heavy-duty pickup fell more than 60%, and RV engine sales fell nearly 40%.
“We had an outstanding second quarter in the face of some very real economic challenges, especially in the U.S.,” Tim Solso, chairman and chief executive, said in a statement.