COLUMBUS, Ind. – Marine engine and genset manufacturer Cummins Inc. experienced record sales for a second consecutive quarter with third-quarter profits substantially exceeding the company's earlier forecasts, according to a Cummins press release this morning.
Cummins engine business’ sales rose 53 percent from third quarter 2003 to $1.44 billion, led by sharply higher sales in North America. Overall, engine shipments rose 30 percent from the third quarter 2003 to more than 106,000 units. The engine business reported Segment EBIT of $96 million, compared to $36 million in the third quarter of 2003.
The company's Power Generation business posted Segment EBIT of $17 million on sales of $502 million -- the unit's fourth straight quarterly profit. For the same period last year, Power Generation broke even on sales of $363 million. The segment's consumer business increased 17 percent, with sales for recreational vehicles posting a 21-percent gain.
Cummins reported third-quarter revenues of $2.19 billion, a 34-percent increase from $1.63 billion in the same quarter in 2003. The company's previous quarterly sales record was $2.12 billion in the second quarter of 2004.
Net earnings for the quarter were $116 million, or $2.40 per diluted share – above the company's previous guidance of $1.30 - $1.40 a share. Cummins earned $24 million, or 60 cents per diluted share, in the third quarter of 2003.
As a result of continued performance improvement, Cummins has today increased its earnings guidance for the full year. The company now expects to earn between $7.10 and $7.20 a share in 2004, up from the previous guidance of $5.55 - $5.75 a share. The company expects to earn between $2.15 and $2.25 a share in the fourth quarter.
Cummins said the rapid ramp-up in demand for its products has created some inefficiencies and internal capacity constraints, which it is addressing and believes will have less of an impact in future periods. The company also continues to face challenges caused by rising commodities prices, especially steel, and supply chain constraints, which are expected to continue.
"We continue to participate in the strong market recovery and benefit from our geographic diversification," said Tim Solso, Cummins chairman and CEO."I can't remember a time in my 33-year career with Cummins where all our markets were this strong, and when we were this well-positioned to turn that market strength into earnings and value for our shareholders."
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