Aftermarket

Cummins Reports Record Sales and Earnings in Second Quarter

July 26, 2011

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Cummins reported record sales and earnings for the second quarter on strong growth in nearly every global market.


The company's Engine, Components and Distribution segments each delivered record sales and earnings.

Second quarter sales were $4.6 billion, up 45% from the same period last year. Earnings before interest and taxes were $775 million and included a $68 million gain on the sale of the exhaust business from our Components segment.

Excluding the gain from the sale of the exhaust business, EBIT was $707 million, or 15.2% of sales, the highest level and percent of sales the company has reported in any quarterly period in its history.

Net income attributable to Cummins in the second quarter was $505 million or $2.60 per diluted share. Excluding the $68 million gain ($37 million after tax or $0.19 per share), the company reported earnings of $2.41 per share compared to $1.25 per share in the second quarter of 2010.

As a result of the company's performance in the quarter and its outlook for the remainder of the year, Cummins increased both its sales and EBIT forecast for 2011. The company now expects to earn 14.5% EBIT on $18 billion in sales in 2011.

Engine segment sales of $2.9 billion were up 53% compared to the same quarter a year ago. They were driven by strong growth in global truck markets and off-highway markets including mining and oil and gas. Engine EBIT was $377 million, or 13% of sales.

Within the Engine segment, Cummins' EPA-2010 engines continue to perform well in terms of reliability and fuel economy. In North America, Cummins has shipped 126,000 medium- and heavy-duty engines equipped with selective catalytic reduction after treatment devices to truck and bus customers.

The Components segment, driven by recovery in North American on-highway markets, had its first billion-plus sales quarter. Sales of $1 billion were up 42% year-over-year, and segment EBIT was a record $120 million or 11.6% of sales. The gain on the sale of the exhaust business was not included in the segment results.

The Distribution segment saw a sales increase of 36% compared to the second quarter of 2010 to $785 million as a result of strong demand in oil and gas, mining and power generation markets. Segment EBIT of $106 million, or 13.5% of sales, was a quarterly record.

Cummins' Power Generation segment had sales of $909 million, a year-over-year increase of 28%, while segment EBIT was $105 million or 11.6% of sales. Revenue growth was strongest in the U.S., Europe and China.

The company's non- U.S. markets continued to show strong growth and Cummins had record sales in Brazil, India and China.



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