Cummins 4Q Profit Surges Above Views
Representing its strongest year in company history, Cummins (NYSE:CMI) revealed Tuesday record sales and profit in fiscal 2010, helped primarily by growth in intentional markets and improved productivity during the fourth-quarter.
The Columbus, Ind.-based company posted a fourth-quarter profit of $362 million, or $1.84 a share, compared with $270 million, or $1.36 a share, in the same quarter last year.
The results for the three month period were ahead of average analyst estimates polled by Thomson Reuters of $1.71 a share.
Quarterly revenue for the maker of diesel and natural gas engines, electric power generation systems and engine-related parts was $4.14 billion, up 22% from $3.4 billion a year ago, beating the Street’s view of $3.92 billion.
Earnings were fueled by record sales in its engine, components and distribution segments, with sales up 15%, 25% 44%, respectively, partially offset by declines in its power generation unit, which the company said fell victim to the recession later than its other businesses.
For the full-year, the company earned $1.04 billion, or $5.28 a share, up from $428 million, or $2.15 a share, in the same quarter last year, with revenues up 22% to $13.23 billion.
“The fact that we were able to achieve record profitability in the face of a sharp decline in large North American on-highway markets speaks to the global strength of our business and the work we did to keep the company strong during the recession,” said Cummins CEO Tim Solso. “Given our strong balance sheet, the expected recovery of our North American markets and the global growth opportunities in front of us, we are forecasting further significant growth in 2011 and beyond.”
Based on current forecasts, Cummins sees fiscal 2011 revenue of $16 billion, led by anticipated 25% growth in its engine and components segments, due primarily to improving markets in North America.
In an effort to continue expansion initiatives in emerging markets, the company plans on investment $600 million to $650 million in capital expenditures during the year.