Cummins Second Quarter Revenues and Earnings Up

Cummins Inc. (NYSE: CMI) reported results for the second quarter of 2015, with revenue of $5.0 billion for the period, up 4 percent from the same quarter in 2014.

The increase, year-over-year, according to Cummins was driven by stronger demand in on-highway markets and distributor acquisitions in North America. Revenues in North America increased 12 percent while international sales declined by 6 percent. Within international markets, sales in Brazil fell the most due to the weak economy.

Earnings before interest and taxes (EBIT) increased to $721 million for the second quarter or 14.4 percent of sales, up from $657 million or 13.6 percent of sales a year ago. Net income attributable to Cummins grew 6 percent in the second quarter to $471 million ($2.62 per diluted share), compared to $446 million ($2.43 per diluted share) in the second quarter of 2014. The tax rate in the second quarter of 2015, including discrete items, was 29.5 percent.

“We delivered strong results in the second quarter, despite challenging economic conditions in a number of international markets, and we increased cash returned to shareholders,” said Cummins Chairman and CEO Tom Linebarger. “Earnings improved as a result of good performance by our manufacturing and supply chain organizations and solid execution on material cost reduction initiatives. We returned $517 million to shareholders in the form of dividends and share repurchases in the second quarter and we recently announced a 25 percent increase in our quarterly dividend.”

Based on the current forecast, Cummins expects full year 2015 revenues to grow between 2 and 4 percent, and EBIT to be in the range of 13.5 to 14.0 percent of sales.

Other recent highlights:

• For the ninth consecutive year, Cummins was named one of the Top 50 Companies for Diversity by Diversity Inc.
• The Company announced new environmental sustainability goals and pledged to reach an annual reduction of 3.5 million metric tons of carbon dioxide (CO2) by 2020, which equates to 350 million gallons of fuel.
• For the fourth consecutive year, Cummins was recognized as a Top 25 Supply Chain company by Gartner.

Category: General Update