Cummins reports sales and earnings growth

COLUMBUS, Ind. – Engine and power generation system manufacturer Cummins Inc. (NYSE: CMI) saw fourth-quarter 2003 sales of $1.74 billion and earnings before interest, income taxes, minority interest and preferred dividends (EBIT) of $84 million, compared with sales of $1.41 billion and EBIT of $20 million a year ago, it reported in a statement today.

Net earnings for the quarter before the cumulative effect of an accounting change were $47 million, or $1.07 per share, compared with net earnings of $46 million, or $1.10 per share, in the year ago quarter.

Total sales for 2003 were $6.30 billion with EBIT of $181 million, compared to sales of $5.85 billion and EBIT of $139 million in 2002.

Net earnings before the cumulative effect of accounting changes were $54 million, or $1.36 per share, in 2003 compared with $79 million, or $2.06 per share, in 2002.

The fourth quarter and full-year 2003 net earnings, as reported, were $43 million, or $1.00 per share, and $50 million, or $1.27 per share, respectively, which include a $4 million charge for the cumulative effect of an accounting change resulting from the consolidation of a financing variable interest entity as of December 31, 2003.

Full year 2002 earnings, as reported, were $82 million, or $2.13 per share, which included a $3 million benefit from the cumulative effect of an accounting change. The fourth-quarter and full-year 2002 earnings included a one-time positive income tax adjustment of $57 million for the year.

Second half of the year was better

“2003 was a good year for Cummins, characterized by marked improvement with each successive quarter,” said Tim Solso, chairman and chief executive officer, Cummins. “After a slow start, our markets finally showed signs of improvement following a very tough three-year recession. For the second half of the year, all of our businesses were generating a profit, which was largely due to increased sales in most markets and our ongoing cost-reduction efforts.”

Solso also cited several recent business developments that provide momentum for 2004. For one, Power Generation expects to increase consumer business revenues through its expanded product offering for the towable recreational vehicle and recreational marine markets, according to the company.

Engine and power generation businesses going strong

Total sales for the Engine Business in the fourth quarter were $984 million, a 27-percent increase from sales of $776 million a year ago. Engine Business segment EBIT was $32 million for the quarter versus a loss of $1 million in the fourth quarter a year ago.

The Power Generation Business reported fourth-quarter sales of $392 million, up 21 percent from a year ago. Profitability improved substantially with quarterly segment EBIT of $14 million compared with a loss of $11 million in the fourth quarter last year.

Expectations high for 2004

The company said it expects annual earnings per share in 2004 to be in the range of $3.20 to $3.40, with a first quarter 2004 earnings expectation of $.40 to $.50 per share. Capital expenditures for 2004 are forecasted to be in the range of $125 to $135 million.

Cummins Inc. designs, manufactures, distributes and services engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. It supplies the marine industry with engines and gensets.

• For more of the latest news, click here.