Cummins Inc. on Thursday reported record revenue in 2014 along with a respectable increase in the fourth quarter, due to improvements in the North American truck market.
Fourth quarter revenue totaled $5.1 billion, an increase of 11% percent from the same quarter in 2013. The year-over-year increase was driven by higher revenues in North America, which more than offset lower demand in Brazil and Europe, according to the diesel engine manufacturer.
Net income in the fourth quarter was $444 million, or $2.44 per diluted share, compared to $432 million or $2.32 per diluted share, in the fourth quarter of 2013.
Revenue for the full year was a record $19.2 billion, 11% higher than 2013, with the company attributing acquisitions contributing 3% to revenue growth. Revenue in North America increased 20% and international sales grew 2%
Net income for the full year was $1.65 billion or $9.02 per diluted share, up from $1.48 billion, or $7.91 per diluted share in 2013.
"We reported record revenues in 2014 despite weak economic conditions in several of our most important international markets," said Chairman and CEO Tom Linebarger. "Revenues grew 11% [in the fourth quarter] as demand in on-highway markets in North America improved, we continued executing our distributor acquisition strategy, and we delivered strong growth in China driven by new products."
The company’s engine segment reported fourth quarter earnings before interest and taxes of $315 million, up from $235 million a year earlier. Sales for the segment increased 11% during this time, hitting $2.8 billion.
Cummins said record performance in the components and distribution businesses and higher earnings in the engine business drove improvement in profitability. Results in the company's power generation business fell short of expectations, but it said the actions it has taken to lower costs will improve earnings going forward.
Cummins predicted demand in North American on-highway markets is expected to improve again in 2015, but will be partially offset by continued weakness in international markets and the negative impact of the strong U.S. dollar.
Based on the current forecast, Cummins expects full year revenues to grow between 2% and 4%, and earnings before interest and taxes to be in the range of 13.5% to 14%.