Columbus, Ind.-based engine maker Cummins Inc. reported adjusted quarterly profit that beat Wall Street estimates as sales in North America helped offset weakness in international markets, especially China and Brazil.
Reuters reported the company said on Tuesday (July 31) that revenue declined 4% to $4.45 billion, in line with Wall Street estimates. Excluding the effects of divestitures and currency fluctuations, revenue was flat. Cummins, a major supplier of diesel engines to the RV industry, said net earnings were $469 million, or $2.47 per share, down from $505 million or $2.60 a share a year earlier.
However, gross margins were at record highs in the quarter and forecast improved margins for the full year despite flat revenue, helping drive shares up nearly 8% at midday.
Cummins executives said the company was cutting costs, including tightening up on travel and looking to freeze hiring in some parts of the company, with uncertain global economic conditions pressuring truck sales in emerging markets.
“It’s a much more volatile economy than we were looking at in the first quarter of the year and much harder to predict,” CEO Tom Linebarger told analysts on a call. “However, our view still is that developing countries will be growing faster than developed countries and investing in infrastructure.”
Reuters reported that excluding gains from divestitures, Cummins earned $2.45 per share, topping the average Wall Street forecast of $2.28, according to Thomson Reuters I/B/E/S.
“Despite lower revenues, Cummins did a good job improving gross margins on price improvement, mix and manufacturing efficiencies,” S&P Capital IQ equity analyst Jim Corridore wrote in a note. “We think Cummins is well positioned in the current environment and should see operating leverage when revenue trends improve.”
Earlier this month, Cummins cut its sales forecast on weaker orders from truck and power generation customers, a stronger dollar and softer-than-expected demand in emerging markets.
In the engine segment, sales declined 2%. Improved North American truck and construction market demand was offset by lower sales to China construction, Brazilian truck and North American oil and gas markets.
Component sales were unchanged. Higher demand in North America and Brazil was offset by lower demand in Europe and China as well as the impact of divestitures completed in 2011.
Power generation sales were also unchanged as higher sales in North America offset lower demand in Europe, China and Latin America.
Sales in the distribution segment rose 1%, with higher parts and service growth in several regions more than offsetting weaker demand in the markets for North American oil and gas and Middle East power generation.
“Second-quarter gross margins were at record levels as we continue to drive improvements in productivity and quality,” Linebarger said.
Earnings before interest and taxes (EBIT) were $669 million or 15% of sales. Cummins expects full-year revenue of $18 billion, with EBIT between 14.25% and 14.75% of sales.
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Engine builder Cummins Inc. is in a strong position to continue expanding in global markets and meet its long-term growth targets, Cummins Chairman and CEO Tom Linebarger told shareholders at the company’s annual meeting today.
According to a press release, Linebarger highlighted Cummins’ 2011 results, including record financial performance with sales up 36% from 2010 to more than $18 billion, and earnings before interest and tax (EBIT) up 54% to $2.56 billion. Cummins’ outstanding 2011 performance and the strong start to 2012 positions the Company to achieve its goal of $30 billion in sales in 2015, he said.
“Our technology leadership in markets around the world enables Cummins to capitalize on the macro trends that are shaping the global economy — stringent emission standards, rising energy prices, globalization and infrastructure growth,” Linebarger said.
The company’s profits have tripled over the past decade as investments in growth, new products and leading-edge technology have paid off, he said. Cummins’ strategy to focus on five growth accelerators makes it possible to meet the challenges of the changing global economy — adopt a growth mindset, develop from a multinational to a global company, achieve supply chain excellence, deliver Customer Support Excellence (CSE), and invest in leadership development.
“I’m proud to report a strong year in 2011 with record financial performance and I believe our future is even brighter as we capitalize on our current strengths and future opportunities,” said Linebarger said. “However, I am even more proud of the hard work and commitment of the 44,000 Cummins employees who come to work each day not only making a difference here, but having a positive impact on the community as well.”
Diesel engine maker Cummins Inc. reported a 33% rise in first-quarter profit due to strength in the North American truck, generator and construction markets, and a growing global mining business .
According to Reuters, the Columbus, Ind.-based company reported net earnings of $455 million, or $2.38 per share, compared with $343 million, or $1.75 per share, a year earlier while sales rose 16% to $4.5 billion.
Cummins and other U.S. industrial companies – including Caterpillar Inc. – are relying on strength in North America and mining to offset troubles in big emerging markets and Europe. Revenue in North America grew 40% in the first quarter for Cummins and mining engine sales grew 19%.
“Cummins continues to benefit from its geographic diversification and its leadership position in a number of end markets as evidenced by our very strong first quarter results,” said Tom Linebarger, chairman and CEO.
The company also affirmed its forecast that earnings before interest and taxes would represent 14.5% to 15% of sales in 2012, or nearly $3 billion. That compares with $2.56 billion in 2011.
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Cummins Inc. today (April 24) announced a significant expansion of its Seymour, Ind., campus that includes investing $219 million in new construction and the addition of 290 jobs to support the company’s global high-horsepower engine business.
According to a press release, Cummins Chairman and CEO Tom Linebarger was joined by Indiana Gov. Mitch Daniels, U.S. Rep. Todd Young and Seymour Mayor Craig Luedeman at an event that was attended by the 525 employees of the Seymour engine plant.
This is the third major announcement in Seymour in two years and in that time the company has added new engineering and production test cells, constructed a new shipping and receiving dock, enlarged the energy center and begun work on the QSK95 and the QSK120, the most powerful high-speed diesel engines in the world.
As part of the expansion, Cummins is adding new warehouses, more engineering and production test cells, a new office building that will house up to 500 people, a cylinder block line and parking for the new employees. Included is a new manufacturing facility for aftertreatment components for high-horsepower engines.
The new jobs are engineering and advanced manufacturing positions that will support the company’s global high horsepower business.
Cummins Inc. says it will be ready to ship its full line-up 2014-compliant heavy-duty diesel and natural gas engines a full year ahead of deadline, and they’ll feature improved reliability and fuel economy.
As reported by Trucking Info, Cummins announced at the Mid-America Trucking Show Wednesday (March 211) in Louisville, Ky., that the engines will deliver up to 2% fuel economy improvement over today’s products and will use the same proven high-pressure common rail fuel systems, VGT Turbocharger and fully integrated electronics for improved combustion efficiency, performance and reliability.
Base engine improvements reduce the parasitic load on the engine through high-efficiency water, fuel and lube pump systems. Cummins engines will meet the 2014 fuel efficiency and greenhouse gas standards beginning in January 2013.
“We met the EPA 2010 standard on time, and our engines have earned their industry-leading reputation for great reliability and fuel economy. Our product development teams are delivering even better products where it counts — to our customers — and our engines are meeting the 2014 fuel-efficiency and GHG standards a full year early,” said Rich Freeland, Cummins vice president and president of engine business.
Cummins will build on the success of its EPA 2010 mid-range and heavy-duty products with the same capable base engines and emissions architecture for 2013. All commercial vehicle diesel engines feature the Cummins Emission Solutions EcoFit Ultra-Low Emissions exhaust aftertreatment system, integrating a diesel particulate filter and selective catalytic reduction. On-board diagnostics, proven on hundreds of thousands of engines since 2007, will be extended across the entire lineup.
In addition to the broad diesel lineup from the ISB6.7 to the ISX15, Cummins will continue to offer the Cummins Westport ISL G, the top-selling natural gas engine, and it will introduce the Cummins Westport ISX12 G into full production in 2013. Cummins Westport is a joint venture between Cummins Inc. and Westport Innovations.
Columbus, Ind.-based Cummins Inc. announced that Carole Casto, a leader in the company’s Corporate Responsibility program, will be Cummins’ new executive director of corporate communications.
“As Cummins grows into a global company, effective corporate communications takes great planning and strategic thinking to make sure the right message reaches the right audience. Carole has demonstrated she has those skills,” said Marya Rose, vice president and chief administrative officer at Cummins.
Casto currently serves as director of Community Engagement in Corporate Responsibility, playing a key role in the program’s expansion outside the United States. She also helped lead the process that resulted in the department focusing on three key issues: education, the environment and social justice/equal opportunity
Casto is a graduate of Marquette University in Milwaukee, Wis., and joined Cummins in 2003. She will continue working on some key Corporate Responsibility initiatives as she makes the transition to her new role during the first quarter of the year. She will continue to be based in Indianapolis.
Columbus, Ind.-based Cummins Inc. today reported record sales, profits and cash flow from operations for all of 2011 as well as strong results for the fourth quarter.
Fourth-quarter revenue of $4.9 billion increased 19% from the same quarter in 2010 and set a new quarterly record for the diesel engine builder. The increase year-over-year was driven by higher demand in truck, construction, power generation and oil and gas markets in North America. The company also experienced strong growth in global mining markets. Growth in these markets offset weaker demand in the construction market in China and power generation in India.
Fourth-quarter net income jumped to $548 million, or $2.86 a share, from $362 million, or $1.84 a share, a year earlier. Excluding some items, profit was $2.56 a share, compared with $2.24.
Earnings before interest and taxes (EBIT) was $768 million for the fourth quarter. Excluding special items, EBIT was $677 million or 13.8% of sales, representing a 25% growth in earnings year-over-year.
Revenue for the full year was $18 billion, up 36% from 2010, with strong growth in most geographic regions.
Net income attributable to Cummins for the full year was $1.85 billion ($9.55 per diluted share), up from $1.04 billion ($5.28 per diluted share) in 2010. EBIT for the year, excluding special items, was $2.56 billion or 14.2% of sales, compared to $1.66 billion or 12.5% of sales in 2010.
“Cummins had its best year ever in 2011, despite economic uncertainty in a number of regions. We continue to benefit from our leading position in a number of end markets and geographies,” said Tom Linebarger, chairman and CEO. “Revenue in the United States grew 53% and international revenue grew 27% year-over-year. In fact, we experienced record full-year revenues in North America, Brazil, China, India and a number of other important markets.”
Based on the current forecast, Cummins anticipates that total revenues will increase 10% in 2012, with EBIT in the range of 14.5% to 15% of sales.
“Our 2011 results and our forecast for 2012 reaffirms our confidence in reaching our goal of achieving $30 billion in sales and 18% EBIT in 2015,” Linebarger said.
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Engine maker Cummins Inc. is finding that going green can be profitable, according to an Associated Press report.
Cummins has invested about $10 million in 70 projects in its Indiana facilities since 2007, leading to annual savings of $4 million. Throughout the company, a total investment of about $28 million is providing annual savings of $20 million corporate-wide.
Energy and environmental relations Director Laurie Counsel says few initiatives undertaken by Cummins have produced a better return on investment.
Cummins recently became a partner in the U.S. Department of Energy’s Better Buildings, Better Plants Challenge. That program requires participants to achieve an energy-reduction goal. Cummins is shooting for a 25% reduction by 2015.
Every Thursday for two months, Chen Yang would take a two-hour break from work. But, according to a report in China Daily USA, it wasn’t for lunch, but to teach a Chinese language course to about 30 fellow American colleagues at Cummins Inc., an engine maker located in Columbus, Ind.
“In the beginning, they could only say ni hao (“how are you” in Mandarin). But now they are able to look at the pinyin and pronounce each word perfectly. That was really rewarding,” says Chen, who works as a global emissions compliance analyst at Cummins.
Native-speaking employees, such as Chen, volunteer their services to the Cummins Chinese Affinity Group (CCAG) to teach a series of Chinese language classes, which take place over a six-week period twice a year. The organization, which has about 300 active members, aims to promote and cultivate interest in the Chinese culture at Cummins. A total of 80 non-Chinese employees signed up for the language classes this year.
The course teaches more than pronunciation. It aims to instill an appreciation for Chinese food and tea, and to show participants how to greet a Chinese person when you meet him or her for the first time.
For a long time, Cummins has infused a strong Chinese presence in Columbus. The company, in conjunction with the Columbus Chinese Association, hosts an annual Chinese New Year party for its employees as well as Columbus residents. The mayor of Columbus, Fred Armstrong, attends the event every year.
The Fortune 500 company employs 16,000 people in the United States, most of them in Columbus. Its large presence in China – 9,000 employees – shows its devotion to its business overseas.
China is, after all, Cummins’ second-largest market after the US, representing 15% to 20% of the company’s business. The company’s revenue in China is expected to be 3.8 billion yuan ($596.8 million) this year and is expected to grow rapidly year-on-year.
“China is becoming a more and more important part of our business. Every week, we have our Chinese customers visiting us in Columbus. Last week, we had a visit from Beiqi Foton Motor, Dongfeng Motor and LiuGong Machinery were here, too,” says Edmund Yu, who is the director of international marketing and also head of CCAG at Cummins.
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Elkhart, Ind., Mayor Dick Moore announced today the city is a recipient of the 2011 Cummins Environmental Challenge Grant.
According to a press release, the $10,000 check was presented to Moore by Kathy Rosebrook, senior process engineer at Cummins Onan Corp. in Elkhart. The grant will be used to make additional improvements to the former LaBour Pump brownfield on Sterling Avenue.
The property was historically an industrial manufacturing facility and closed its operations in 2005. Since that closing until July 2010 the property had been abandoned and was not only a deteriorating eyesore but also a public nuisance.
In July 2010 the City of Elkhart had the property razed and environmentally remediated in accordance with Environmental Protection Agency (EPA) action plans. Potential uses for this very narrow strip of land were quite limited in scope. The City of Elkhart decided to transform this former brownfield site within the city’s industrial corridor into a self-sustaining environmental park.
Preliminary plans include raised bed gardens, a walking/biking path, and a greenhouse with community access. Future plans include renewable energy sources placed within the park such as wind and solar.
Cummins Inc. said it views the LaBour Pump project as a platform to increase their employees’ involvement and positively impact the community.
“This grant demonstrates Cummins’ long-standing commitment to the communities where its operations are located,” said Mayor Moore. “It is through gifts such as this that the city is able to make the improvements that are needed without putting additional strain on the city’s budget. I am proud and humbled by the dedication of our corporate partners and their employees that continue to demonstrate a desire to improve the community where they live, work, and play.”
After achieving significant energy efficiency and greenhouse gas (GHG) reductions over the last five years, Cummins Inc. is now “raising the bar on its efforts by becoming a Partner in the Better Buildings, Better Plants Challenge.”
According to a press release, President Obama recently announced the challenge. The criteria for being a Challenge Partner in the U.S. Department of Energy’s program include reducing energy use by at least 25% per dollar revenue from 2005-2015, committing to complete a larger-scale energy efficiency project and reporting details on energy use and progress.
Cummins joined the U.S. Environmental Protection Agency’s Climate Leaders Program in 2006 and set the goal of a 25% reduction of GHG emissions per dollar revenue from 2005 to 2010. In May 2011, the company announced that it had exceeded the goal with a 28% reduction.
In becoming a Partner in the Better Buildings, Better Plants Challenge, Cummins will be building on this effort as approximately half of that 28% GHG reduction came as a result of energy efficiency improvements. The company’s new 25% energy efficiency goal over the 2005 to 2015 timeframe is equivalent to about a 40% GHG reduction.
“Cummins strongly believes in the business case for energy efficiency,” said Tom Linebarger, Cummins president and COO. “It is good business, good for our business, and it is the right thing to do. By being a Challenge Partner, Cummins commits to aggressively pursue energy efficiency, which will continue to move our work forward. The Challenge also provides a forum to both share our knowledge and learn from fellow Partners that can encourage other companies to pursue energy efficiency actions.”
Columbus, Ind.-based engine maker Cummins Inc. announced today (Nov. 2) that Jim Lyons has been named Vice President — Chief Manufacturing Officer.
“In his new role, Jim has significant responsibilities in helping us achieve our goal to make improvements and savings through the Supply Chain organization,” Lisa Yoder, vice president — Global Supply Chain and Manufacturing, said in a news release.
Lyons will work on improving the company’s worldwide manufacturing performance with an emphasis on successful delivery, schedule stability and attainment, and waste reduction.
“His work will include growing capacity ahead of demand and providing a leadership role in aligning manufacturing, purchasing and supply chain,” Yoder said.
In addition, Lyons will be in charge of Cummins’ Health, Safety and Environmental organization. “Jim has always demonstrated a passion for safety and I am confident that he can lead us to achieve world class safety performance over the next few years,” Yoder said.
Lyons brings to the position 38 years of experience with Cummins, most recently as president of Cummins Turbo Technologies (CTT), where he led that business to a turn-around in performance. He will continue in his CTT role through the end of the year as he works with his replacement to ensure a smooth transition. He will also begin shifting into his new role. Lyons replacement at CTT will be announced soon.
“One vital link in our supply chains is manufacturing and it is important that we have the kind of leadership at the corporate level to accelerate our efforts in operational excellence,” Yoder said. “That is why we are creating the key role of Vice President — Chief Manufacturing Officer for Cummins.”
BorgWarner Inc., the world’s biggest maker of automatic-transmission parts for vehicles, filed a lawsuit accusing Cummins Inc. of infringing three patents for a titanium wheel used in engine turbochargers.
Bloomberg reported that BorgWarner said it has “made considerable investments in improving turbocharger technologies,” and Cummins is using the inventions “with reckless disregard” of BorgWarner’s rights, according to the complaint filed today in federal court in Asheville, N.C.
Turbochargers are used to improve the power and efficiency of smaller engines, and governments are pushing automakers to increase fuel economy in vehicles. BorgWarner in July said its second-quarter profit almost doubled, and the Auburn Hills, Mich.-based company boosted its forecast for revenue and profit for this year because of increased turbocharger sales.
BorgWarner previously sued Honeywell International Inc. over the same patents and settled the case in May for $32.5 million.
Cummins, based in Columbus, Ind., said yesterday (Oct. 26) that sales in its components unit, which includes turbochargers, rose 32% to $1.02 billion. Janet Williams, a spokeswoman for the company, said in a telephone interview that Cummins doesn’t comment on pending litigation.
The compressor wheels at issue in the case direct air to an engine’s intake manifold. BorgWarner’s inventions related to a cost-effective cast titanium compressor wheel, the design of the wheel and a method for making turbochargers with the titanium wheel.
Engine maker Cummins Inc. today (Oct. 25) reported strong sales and earnings for the third quarter. Year-over-year growth was driven by global mining and oil and gas markets, on-highway markets in North America and Brazil, and construction demand in Asia.
Third quarter sales were $4.6 billion, up 36% from the same period last year. All segments delivered double-digit growth over the prior year.
Earnings before interest and taxes (EBIT) were $640 million, or 13.8% of sales, compared to $449 million, or 13.2% of sales, in the same period in 2010.
Net income attributable to Cummins Inc. in the third quarter was $452 million, an increase of 60% from a year ago, or $2.35 per diluted share. This compares to $283 million or $1.44 per diluted the year prior.
“We delivered strong performance in the third quarter and 2011 will be a record year for the company,” said Tom Linebarger, president and COO. “Many of our key markets continue to show strong growth, for example, mining, oil & gas, and North American on-highway markets. However, as discussed at our recent investor conference, there is some uncertainty around the macro-economic environment. Government actions to reduce inflation in India and China have resulted in softer near-term demand than we previously expected. This, along with the recent strengthening of the U.S. dollar, has caused us to slightly soften full year revenue guidance to a range of $17.5 to $18 billion, which would represent an increase of over $4 billion or over 30% compared to 2010.”
The company now expects to deliver record profits of between 14% and 14.5% EBIT, compared to 12.5% in 2010. This guidance excludes gains from the sale of the exhaust and light-duty filtration businesses.
Engine segment sales of $2.96 billion were up 43% compared to the same quarter a year ago. This increase was driven by on-highway markets in North America and Latin America, strong worldwide oil and gas, mining and construction activity. Engine segment EBIT was $349 million, or 11.8% of sales.
Power Generation segment, which includes RV supplier Cummins Onan, had sales of $874 million, a year-over-year increase of 10%. Improvements in China, North America, Europe and the Middle East offset weaker demand in India. Power Generation segment EBIT was $92 million or 10.5 percent of sales.
Components segment sales of $1.02 billion were up 32% year-over-year. All businesses experienced strong growth driven primarily by higher demand in on-highway markets in the US and Europe. Components segment EBIT was $113 million, or 11.1% of sales.
Distribution segment sales were $783 million, an increase of 37% from the third quarter last year. Growth over the prior year was driven by oil and gas markets in North America, power generation demand in Asia, and industrial demand ahead of the Tier 4 emission change in North America and Europe. Distribution segment EBIT was $104 million, or 13.3% of sales.
For the full report click here.
Engine builder Cummins Inc. recently announced that it has been named to the Dow Jones Sustainability World Index for the seventh consecutive year.
According to a news release, the index recognizes the top 10% of the world’s largest public companies for their economic, social and environmental performance. Altogether, 342 companies were named to the 2011 World Index across 57 industry sectors.
Cummins was among just 10 U.S. companies in the broader listing of industrial goods and services to make the World Index and one of two U.S. companies named a sustainability leader in the industrial engineering sector. The company was also named to the North America Index for the fifth consecutive year.
Dow Jones, working with SAM, an investment firm focused exclusively on sustainability-related investing, has developed a “best-in-class” approach to analyzing companies across a wide range of sustainability metrics.
Companies are assessed on their performance in areas such as corporate governance, risk management, climate change strategy, environmental management and eco-efficiency, labor practices, corporate citizenship and philanthropy, employee development and supply chain standards. In addition to a universal set of criteria, companies also were analyzed on issues specific to their industries.
“We worked to create a cleaner and healthier environment, build stronger communities and to create the right work environment where the diversity of our employees fuels the innovation our customers count on,” Chairman and Chief Executive Officer Tim Solso said of 2010-2011 in the company’s most recent Sustainability Report.