28.07.2014 15:15:02

Cummins Lifts Full Year Revenue Outlook After Q2 Profit Tops View

(RTTNews) - Engine maker Cummins Inc. (CMI) Monday reported increased profit for the second quarter that topped estimates, as revenues increased 7 percent from last year, with strong performance in North America. The company also boosted its revenue forecast for the year.

Net income attributable to the company climbed to $446 million from $414 million in the previous year. Earnings per share rose to $2.43 from $2.20.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $2.38 per share for the quarter. Analysts' estimates typically exclude special items.

Earnings before interest and taxes or EBIT were 13.6 percent of sales, compared to 13.7 percent of sales a year ago.

Net sales improved 7 percent to $4.835 billion from $4.525 billion last year, driven by stronger demand in on-highway markets and distributor acquisitions in North America. Wall Street expected revenues of $4.83 billion.

Revenues in North America increased 14 percent while International sales slipped 1 percent from last year, as lower revenues in Mexico, Brazil and India offset stronger demand in China.

Sales grew 3 percent in the Engine segment to $2.7 billion, as increased demand in on-highway markets in North America offset weakness in global power generation and the Brazilian truck market.

In the Components segment, sales climbed 15 percent to $1.3 billion. The division witnessed higher demand in on-highway markets in North America, Europe and China that more than offset weaker demand in Brazil.

Distribution Segment revenues jumped 30 percent to $1.2 billion, and rose 2 percent excluding acquisitions.

Power Generation sales slid 9 percent to $743 million, amid lower revenues in most markets particularly North America, Asia Pacific and Middle East.

CEO Tom Linebarger said, "Demand is growing in on-highway markets in North America this year as the economy improves and we have gained market share in medium duty truck and bus markets. Our Components business delivered very strong results in the second quarter generating record sales and profits."

Cummins expects full year 2014 revenues to grow between 8 and 11 percent, up from its previous forecast of growth in the range of 6 to 10 percent, due largely to improving demand in North America. EBIT is expected to be in the range of 12.75 to 13.25 percent of sales.

CMI closed down 0.4 percent on Friday at $150.15.

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