Cummins Posts First Quarter Loss

Cummins Inc. posted a $25 million loss on sales of $1.35 billion for the first quarter 2001.

That compares to a $42 million profit on sales of $1.65 billion for first quarter 2000.
"We are in a severe downturn in many of our North American markets, including heavy duty truck, pickup trucks, recreational vehicles and Nelson’s truck and consumer business," said Chairman and CEO Tim Solso. "Despite the effects of this downturn, the vast majority of the company’s business is profitable."
Revenues for the engine business were $768 million, down 27% from first quarter 2000. The unit lost $34 million before interest and taxes for the quarter. A year earlier, it reported a first quarter profit of $28 million.
Worldwide sales of heavy duty truck engines were $236 million versus $415 million a year ago. Shipments to North American markets were down 60%. Sales to the medium duty truck and bus markets totaled $144 million, down from $150 million first quarter 2000. Shipments to North American markets were down 30%.
Sales to light duty automotive and recreational vehicle markets totaled $121 million, down 43% from a year ago. Demand fell for recreational vehicle engines and engines for DaimlerChrysler’s Dodge Ram pickup. Sales to agriculture, construction, mining, marine and other industrial markets were level compared to 2000.
Sales of filtration and other products were $272 million, essentially flat compared to first quarter 2000. The Holset turbocharger saw sales increases from the previous year. Filtration business revenues were hurt by the weakness in North American on- and off-highway OEM markets. Group earnings, before interest and taxes, were $20 million compared to $30 million first quarter 2000.
Power generation sales were $309 million, down 6% from a year ago. Earnings before interest and taxes were $8 million compared to $23 million first quarter 2000.
Solso said they expect to return to profitability in the second quarter but, because North American markets are volatile, full year projections are difficult to make.