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.
Spartan Motors Chassis Inc., a subsidiary of Spartan Motors, Inc., announced Tuesday (Aug. 10) it recently received approval from Cummins Inc. for the installation of its 2010 Environmental Protection Agency, or EPA-certified ISC and ISL diesel engines for use in the emergency response market.
Charlotte, Mich.-based Spartan Chassis and Cummins committed a significant amount of engineering resources to the development, testing and introduction of the mid-range engines, according to a news release. With horsepower ranging from 330 to 450, the engines will continue to deliver powerful performance as well as improved efficiency and durability.
“Customers in the emergency-response market have a range of needs, and most of them require high levels of capability,” said John Sztykiel, president and CEO of Spartan Motors. “Spartan and Cummins worked productively together to validate the installation of the 2010 technology, and I am confident that the value, innovation and performance of our products integrated with these diesel engines will meet — if not surpass — the expectations of our customers.”
The new diesel engines are available for hands-on training during Spartan’s 16th Annual Fire Truck Training Conference which began Sunday in Lansing, Mich. Fire truck service personnel from across North America have come to the event for rigorous training on the company’s products and services, including the Gladiator, Metro Star and Furion emergency-response cab and chassis.
Sztykiel added, “New requirements often result in added complexity for vehicle components and systems. Knowledge then becomes critical in holding down the cost of repairs and maintaining these vehicles. Spartan provides the preventative maintenance, troubleshooting and service information needed by technicians to make sure their truck, or fleet, is ready for the next call.”
Spartan’s training conference will provide attendees with a comprehensive understanding and hands-on demonstrations of vehicle components and systems. Several of the 35 courses led by instructors from major suppliers of fire vocational equipment and Spartan Chassis training specialists will provide preparation for Emergency Vehicle Technician (EVT) Certification exams to be held during the week.
The RV industry should finish this year strong, in the opinion of one key industry supplier – Garry Enyart, director of RV business for Cummins Power Generation, Minneapolis, Minn.
Enyart, of course, is not alone in that opinion.
”What we are seeing is that 2009 is a non-traditional demand curve,” Enyart told RVBusiness during the recent RV Dealers International Convention in Las Vegas. ”Obviously, the first half of the year was relatively slow, but the last half of the year is going to finish strong. I believe that Q1 of 2010 will be a good quarter as well and 2010 looks to be a good year overall compared to 2009 and the last half of 2008.”
Enyart said his expectations are based on the fact that Cummins, a supplier of Onan generators, has watched dealer inventories closely and tracked some of the larger dealers.
”As we’ve watched their inventory, obviously, the motorized inventory has been drawn down as have the towables” he said. ”We are seeing lead times extended by a number of both towable and motorized manufacturers. We think that bodes well for the future, as well as stabilization of manufacturing schedules at the OEMs. That means fewer shutdowns than last year.”
Enyart said he still has faith that the Baby Boomer generation that has begun to retire will be looking to make lifestyle changes.
”Starting in 2010 for 14 years – on average – every eight seconds, somebody turns 60,” Enyart said. ”That’s 340,000 people a month. That’s a significant demographic.”
And he’s convinced that those retirees will look to purchase RVs, he said.
”Many of my (non-RV industry) friends are looking at the RV lifestyle as a way to keep life simpler,” Enyart offered. ”You don’t have to have real estate in Florida where you have to worry about hurricane insurance and a lot of added costs and taxes going up. You can be mobile and at a variety of price points, you can lead a nice lifestyle.”