Cummins Engine Co. reports its first-quarter profits more than tripled from last year, despite nearly flat sales.
The company earned $24 million during the three months ended March 28. That compares to earnings of $7 million during the first quarter of 1998, when Cummins took a special charge of $43 million to cover costs associated with repairs to older engines. Without the charge, Cummins would have earned $37 million.
The latest results beat analysts' estimates by about 5 cents per share.
Total sales were $1.51 billion, compared to $1.5 billion a year ago. But in the heavy duty truck engine market, Cummins' sales in North America were up 20%. Worldwide heavy duty truck engine sales were 8% higher, but weaker in the United Kingdom and Mexico. That was offset by poor demand in agricultural engines and by weak Asia and Latin American markets.
"We are pleased with the significant progress we have made in reducing our selling, administrative and research and engineering costs," says chairman and CEO Jim Henderson. "Costs for products introduced last year should also begin to improve as we ramp up production." Those new engines include the Signature 500 and the ISM and ISL engines.