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.