Cummins Inc. has reported results for the second quarter of 2014.
Second quarter revenue of $4.8 billion increased 7% 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.
Revenues in North America increased 14% while international sales decreased 1% compared to the second quarter a year ago. Within international markets, lower revenues in Mexico, Brazil and India offset stronger demand in China.
Earnings before interest and taxes (EBIT) were $657 million for the second quarter or 13.6% of sales. This compares to$621 million or 13.7% of sales a year ago.
Net income attributable to Cummins in the second quarter was $446 million ($2.43 per diluted share), compared to $414 million($2.20 per diluted share) in the second quarter of 2013.
"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," says Chairman and CEO Tom Linebarger. "Earlier this month we raised the quarterly dividend by 25% and the Board of Directors also approved a new $1 billion share repurchase program, consistent with our commitment to return 50 percent of operating cash flow to shareholders and reflecting our confidence in the Company's future."
Based on the current forecast, Cummins expects full year 2014 revenues to grow between 8% and 11%, up from its previous forecast of growth of between 6% and 10%, due largely to improving demand in North America. EBIT is expected to be in the range of 12.75 to 13.25% of sales.
Other recent highlights:
- The company named Rich Freeland as President and Chief Operating Officer
- Cummins was named 2013 Powertrain Supplier of the Year by Chrysler Group
- The company was ranked among the World's Best in Newsweek's 2014 Green Rankings for our continuous efforts to reduce our environmental footprint and make a positive impact on the environment
- For the ninth straight year Cummins was awarded a perfect score by the Human Rights Campaign Foundation (HRC) in the 2014 Corporate Quality Index as part of HRC's Best Place to Work Initiative
- Second quarter 2014 detail (all comparisons to same period in 2013)
Engine Segment
- Sales - $2.7 billion, up 3%
- Segment EBIT - $311 million, or 11.3% of sales, compared to $339 million or 12.8% of sales
- Increased demand in on-highway markets in North America offset weakness in global power generation and the Brazilian truck market
Components Segment
- Sales - $1.3 billion, up 15%
- Segment EBIT - $185 million, or 14.5% of sales, compared to $136 million or 12.2% of sales
- Higher demand in on-highway markets in North America, Europe and China more than offset weaker demand in Brazil
Power Generation Segment
- Sales - $743 million, down 9%
- Segment EBIT - $61 million, or 8.2% of sales, compared to $76 million or 9.3% of sales
- Lower revenues in most markets particularly North America, Asia Pacific and Middle East offset stronger demand in China and Africa
Distribution Segment
- Sales - $1.2 billion, up 30% overall and up 2% excluding acquisitions
- Segment EBIT - $126 million, or 10.2% of sales, compared to $100 million or 10.5% of sales
- Higher revenues were primarily driven by acquisitions and stronger demand in North America and Africa.
