Truck engine manufacturer Cummins, Inc. posted a net income of $453 million on revenues of $5.3 billion in the third quarter of 2017, up 56 percent and 26 percent, respectively, compared to the same period in 2016.
Net income attributable to Cummins Inc. in the third quarter stood at $453 million, up 56 percent from the $289 million in the third quarter of 2016, the company announced Tuesday.
The Columbus, Ind.-based truck engine manufacturer recorded earnings per diluted share of $2.71 per diluted share for the quarter, up from $1.72 per share the previous year, on revenues of $5.3 billion. Total revenues increased 26 percent from the same quarter in 2016, while revenues in North America increased 25 percent due to higher demand in truck, oil and gas and construction markets. International sales grew 28 percent primarily due to strong truck and construction demand in China, sales of new products in India, and increased demand from global mining customers, said Cummins.
“Cummins experienced positive momentum in demand in a number of important markets, resulting in strong sales growth in the third quarter,” said Chairman and CEO Tom Linebarger. “Earnings improved over the year-ago period due to stronger volumes and operational improvements that more than offset increased quality costs. Year to date, we have returned $913 million to shareholders in the form of dividends and share repurchases consistent with our plan to return 50 percent of Operating Cash Flow in 2017.”
All of Cummins’ business segments saw revenue increases for the third quarter, with Components Segment sales growing 34 percent to $1.5 billion. International revenue increased 45 percent, primarily due to higher truck demand in China and the sale of new products in India, while sales in North America increased 26 percent due to stronger orders from on-highway customers, said Cummins.
Engine Segment sales rose 26 percent to $2.3 billion, primarily due to increased demand globally in truck and construction markets. Power Systems Segment revenues rose 23 percent to $1.1 billion mostly due to increased demand for industrial engines from mining and oil and gas customers, said Cummins.
The company’s Distribution Segment saw sales increase 17 percent to $1.8 billion thanks to acquisitions and the disposal of power generation rental assets in North America. Earlier this year, Cummins entered into an asset purchase agreement with battery pack designer and developer Brammo, Inc., as part of its efforts to become a “global electrified power leader,” the company said.
Additionally, the Eaton Cummins Automated Transmission Technologies joint venture became fully operational in August. According to Cummins, “the joint venture will capitalize on the secular shift to more automated transmissions in commercial vehicle markets.” The joint venture, however, temporarily caused the company to tighten its EBIT margins but should add value to the company over time, according to investment bank Stifel.
Based on its current forecast, Cummins expects full-year 2017 revenues to grow up to 15 percent, an increase from the company’s previous projection of 11 percent growth.
Cummins revs up earnings in Q3 2017
