Cummins 2Q Profit Doubles as Revenues Soar
Columbus, Ind.-based Cummins Inc. second-quarter net income more than doubled on a steep increase in sales and a gain on the sale of its exhaust business, the engine maker said Tuesday (July 26).
The Associated Press reported that the results came in well ahead of Wall Street estimates and the company boosted its sales prediction for the year. In premarket trading, Cummins shares jumped $5.63, or 5.3%, to $112.29.
Cummins earned $505 million, or $2.60 per share, up from $246 million, or $1.25 per share, in the same quarter last year. Excluding the one-time gain on the sale of the exhaust business, Cummins said it posted an adjusted profit of $2.41 per share.
Sales rose 45% to $4.64 billion from $3.21 billion in the year-ago period.
Analysts, on average, expected a profit of $2.07 per share on $4.4 billion in sales, according to a FactSet survey.
Cummins, which makes diesel engines and power-generation equipment, said sales at its engine segment jumped 53% to $2.9 billion as a result of strong growth in worldwide truck markets and off-highway markets including mining and oil and gas.
Meanwhile, sales at Cummins’ components business rose 42% to $1 billion, as North American demand for on-highway products continued to recover. Sales at the company’s distribution segment rose 36% to $785 million, while power generation sales rose 28% to $909 million.
The company boosted its sales forecast for 2011 to $18 billion from its April prediction of $17 billion. Analysts expect $17.34 billion in sales for the year, according to FactSet.