COLUMBUS, Ind,. - Cummins Inc. is reporting strong sales and earnings for the third quarter.
Year-over-year growth was driven by global mining and the company's oil and gas markets, on-highway markets in North America and Brazil and construction demand in Asia. Third quarter sales were $4.6 billion, a 36 percent increase from the same period in 2010. All segments delivered double-digit growth over the prior year.
Earnings before interest and taxes were $640 million, or 13.8 percent of sales, compared to $449 million, or 13.2 percent of sales, in the same period in 2010. Net income attributable to Cummins Inc. in the third quarter was $452 million, an increase of 60 percent from a year ago, or $2.35 per diluted share. This compares to $283 million or $1.44 per diluted share a year ago.
"We delivered strong performance in the third quarter and 2011 will be a record year for the company," said Tom Linebarger, president and chief operating officer. "Many of our key markets continue to show strong growth, for example, mining, oil & gas, and North American on-highway markets. However, as discussed at our recent investor conference, there is some uncertainty around the macro-economic environment. Government actions to reduce inflation in India and China have resulted in softer near-term demand than we previously expected. This, along with the recent strengthening of the US Dollar, has caused us to slightly soften full year revenue guidance to a range of $17.5 to $18 billion, which would represent an increase of over $4 billion or over 30 percent compared to 2010."
The company now expects to deliver record profits of between 14 and 14.5 percent EBIT, compared to 12.5 percent in 2010. The guidance excludes gains from the sale of the exhaust and light-duty filtration businesses.
"Cummins is having its best year ever," said Tim Solso, chairman and chief executive officer. "Achieving more than 30 percent revenue growth and record profitability this year, despite all the uncertainty in the world, says a lot about the performance culture at the company. Cummins has the best technology in the industry, a very strong and experienced leadership team and great global partners. I am very confident in the company's future."
Engine segment sales of $2.96 billion were up 43 percent compared to the same quarter a year ago. This increase was driven by on-highway markets in North America and Latin America, strong worldwide oil and gas, mining and construction activity. Engine segment EBIT was $349 million, or 11.8 percent of sales.
Distribution segment sales were $783 million, an increase of 37 percent from the third quarter last year. Growth over the prior year was driven by oil and gas markets in North America, power generation demand in Asia, and industrial demand ahead of the Tier 4 emission change in North America and Europe. Distribution segment EBIT was $104 million, or 13.3 percent of sales.
Sales in the engine segment were $2.96 billion, an increase of 43 percent. Growth was driven by on-highway markets in North America and Latin America, strong worldwide oil and gas and mining activity and industrial engines in North America and Europe