Cummins 4Q Profit Up 17% on Increased Sales
Cummins Inc. said its fourth-quarter earnings rose 17% as the supplier of engines for heavy-duty trucks and motorhomes reported revenue growth in its components and engine segments divisions.
Cummins, the world’s largest engine manufacturer based on sales, said it expects 2014 revenue to rise between 4% and 8% from 2013, according to a Wall Street Journal report.
Demand for Cummins’s engines suffered for much of 2013 in response to falling demand from heavy-duty truck makers and manufacturers of mining and construction machinery. Cummins is the largest supplier of heavy-duty truck engines in North America, accounting for about 40% of the market.
Cummins reported a profit of $432 million, or $2.32 a share, up from $369 million, or $1.95 a share, a year earlier. Excluding special items, earnings increased to $1.94 from $1.93 a share. Net sales rose 6.9% to $4.59 billion.
Analysts polled by Thomson Reuters predicted earnings of $1.98 a share and revenue of $4.21 billion.
Revenue in North America increased 3%, but was offset by international revenue, which slipped 4% from sales declines in Mexico, India, Australia and Europe.
In the engine segment — the largest contributor to revenue — sales increased 2% to $2.56 billion because of strong demand for construction equipment in international markets and increased demand for medium duty trucks in North America, the company said.
Components sales, meanwhile, climbed 21% on higher demand in on-highway markets in North America, Europe and China.