Led by international demand, company reports best quarterly financial results ever

A little over a week after Caterpillar bucked the gloom-and-doom trends by announcing record sales and earnings, another industry heavyweight has reported its financial results for the second quarter of 2008. And much like its neighbors to the west, the news from Cummins Inc. was good - and good enough to prompt the company to raise its expectations for the year.
The Columbus, Ind., manufacturer has reported all-time record sales and profits in the second quarter, as strong global growth offset softness in some North American markets. All four of the company’s business segments reported record financial performance in the quarter, as non-U.S. sales grew to 61% of Cummins’ business – up from 54% for all of 2007 and 57% in the first quarter of 2008.
Second quarter sales grew 16% to $3.89 billion and net income increased 37% to $293 million, or $1.49 a share, compared to $214 million, or $1.06 a share, in 2007.
“We had an outstanding second quarter in the face of some very real economic challenges, especially in the U.S.,” said Cummins Chairman and Chief Executive Officer Tim Solso. “We are managing all of our businesses very carefully and the results speak to the effectiveness of our global growth strategy.”
Cummins said it experienced broad gains in product and geographic markets around the world, including: strong sales growth and market share in the North American heavy-duty engine market despite high fuel prices and weakness in the U.S. economy. It was buoyed by strong medium-duty truck engine sales, especially in Brazil and Mexico; increased demand in the commercial generator business, most notably in the Middle East, Latin America, China and the United Kingdom; sales growth in North America, Europe and China for turbochargers; and significant sales gains for the Cummins Emission Solutions products in North America and Europe, driven by new emissions regulations.
The company also reported significantly higher income from joint ventures worldwide, led by Dongfeng Cummins Engine Co. in China, which saw large gains as result of a pre-buy in the on-highway truck market in advance of new emissions standards. It also saw a 58% increase in the company’s Distribution Business sales, led by strong organic growth in Europe, the South Pacific and Middle East and the acquisition of a majority interest in a previously independent distributor in the United States.
The strong second quarter performance came in the face of continued economic weakness in the United States, which has affected the Company’s consumer-related markers. For the quarter, engine sales to Chrysler for the Dodge Ram heavy-duty pickup fell more than 60% from the same period in 2007; RV engine sales fell nearly 40% and consumer power generation sales were off more than 30% from a year ago.
In light of the company’s performance in the first half of the year and its forecast for the remainder of 2008, Cummins also announced that is now forecasting a 15% sales increase for all of 2008, up from its previous guidance of 12%.
“As we look forward, despite the continuing economic uncertainty in the U.S. and Western Europe, and expected increases in materials costs, we are confident that we will continue to see growth in the second half of the year,” Solso said, adding that “2008 will be the fifth consecutive year of record sales and profits for Cummins.”

 

 

Good they should share the wealth with us loyal owners! can I consider myself a share holder since I have owned 5 cummins engine trucks 2 core motors & nearly 50K in parts