Cummins reports “outstanding” 2Q results

COLUMBUS, Ind. – Strong sales in all business units and across nearly every market segment helped marine engine and genset manufacturer Cummins post record revenues and sharply higher profits in the second quarter, the company said in a press release this morning.

Sales in the company’s engine segment rose 57 percent from the second quarter 2003 to $1.4 billion, led by higher sales in North America for heavy-duty truck engines, the company said.

Cummins total sales were $2.12 billion, while net earnings climbed to $82 million, or $1.76 a share, on a fully diluted basis – a 485-percent increase over the same period last year – and exceeded an earlier guidance of between $1.20 and $1.30 a share for the quarter.

Earnings before interest, taxes and minority interest were $148 million, also a single quarter record, Cummins reported. The EBIT represents 7.0 percent of sales, well within the company’s targeted performance range.

“Our second-quarter results were outstanding and reflect our customers’ very positive reactions to our product line,” said Tim Solso, Cummins chairman and CEO. “Sales were very good in all segments, profits were up significantly and margins strong.”

Record second-quarter sales of $2.12 billion were 38 percent higher than the $1.54 billion reported for the same period in 2003. Cummins previous sales record was $1.84 billion in the fourth quarter of 1999.

For the first six months of the year, Cummins reported net earnings of $115 million – or $2.53 a share on a fully diluted basis – on sales of $3.9 billion.

As a result of continued performance improvement, the company increased its earnings guidance for the full year today. Cummins said it now expects to earn between $5.55 and $5.75 a share in 2004, up from the previous guidance of $4.40 – $4.60 a share.

“We are extremely pleased with the improving results in today’s second-quarter report,” Solso said. “Even as we are benefiting from the strengthening conditions in many of our markets, we continue to work hard to control costs, raise quality and improve our customer service to position Cummins for sustained growth in 2004 and beyond.”

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