Cummins Inc. said it has reached its highest quarterly earnings as a percentage of sales in more than 25 years, with second quarter earnings before interest and taxes at $401 million, or 12.5 percent of sales.
This compared with $109 million, or 4.5 percent of sales in the second quarter of 2009.

The company attributes the year-over-year gains to continued productivity improvements within its manufacturing operations and strong performance in international markets.

"We had an outstanding quarter," said Tim Solso, Cummins chairman and CEO. "The work we have done to strengthen our manufacturing operations during the downturn has resulted in significant productivity gains, and we continue to benefit from our leadership position in large and growing international markets such as China, India and Brazil."

Sales of $3.21 billion in the second quarter were 32 percent higher than $2.43 billion in the same quarter in 2009. Net income was $246 million, or $1.25 a share, compared to $56 million, or 28 cents a share, in the same period a year ago.

The sales gains were led by the company's engine and components segments, which each reported 45 percent sales improvements over the same period in 2009. Power generation sales increased 16 percent, while distribution sales rose 24 percent.

Cummins boosted its earnings expectation for 2010 to EBIT of 12 percent of sales on revenues of $13 billion.

"Our strong performance during the downturn has allowed us to make the investments necessary to position the company for a period of long-term profitable growth as our markets continue to improve," said Tom Linebarger, Cummins president and chief operating officer. "We are working hard to prepare for future growth, even as we continue to concentrate on managing the business through this challenging economic period."