Cummins Q3 Profit Increases; Lifts 2014 Revenues Growth Outlook

(RTTNews) - Cummins Inc. (CMI) reported that its net income attributable to the company for the third quarter increased to $423 million or $2.32 per share from $355 million or $1.90 per share in the third quarter of 2013. Analysts polled by Thomson Reuters expected the company to report earnings of $2.28 per share for the quarter. Analysts' estimates typically exclude special items.

The tax rate in the third quarter of 2014 was 34.4 percent and included a non-cash discrete tax expense of $19 million or $0.10 per share.

Third quarter revenue of $4.9 billion increased 15 percent from the same quarter in 2013. The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America, additional content growth for the Components business in Europe and China and higher engine sales to commercial marine customers. Wall Street expected revenues of $4.72 billion for the quarter.

"We delivered strong earnings and cash flow in the third quarter despite facing mixed conditions in international markets....... Although results in our Power Generation business improved in the third quarter, global demand for power generation equipment remains weak. As a result we are considering certain actions to reduce our cost structure starting in the fourth quarter. The cost of the actions being considered could range from $15 million to $40 million," said Chairman and CEO Tom Linebarger.

Based on the current forecast, Cummins expects full year 2014 revenues to grow between 10 percent and 12 percent, up from its previous forecast of growth of between 8 percent and 11 percent, due to stronger demand in North America. Analysts expect annual revenues of $19.00 billion. EBIT is expected to be in the range of 13 to 13.5 percent of sales, excluding the impact of cost reduction activities within the Power Generation business that will commence in the fourth quarter.