First quarter results for Cummins, Inc. showed growth.
The Columbus-based engine manufacturer on Tuesday reported first quarter revenue of $4.7 billion. Company officials say that is up seven percent from the same quarter in 2014. They say that the increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America. Currency negatively impacted revenues by three percent compared to last year, primarily due to a stronger U.S. dollar.
Revenues in North America increased 17 percent while international sales declined by six percent. Within international markets, company officials say that lower revenues in Europe and Brazil more than offset growth in China.
Earnings before interest and taxes (EBIT) increased to $562 million for the first quarter or 11.9 percent of sales, up from $528 million or 12.0 percent of sales a year ago.
Net income attributable to Cummins grew 14 percent in the first quarter to $387 million ($2.14 per diluted share), compared to $338 million ($1.83 per diluted share) in the first quarter of 2014. The tax rate in the first quarter of 2015, including discrete items, was 26.3 percent.
“Record profitability in our Components Segment, execution of our distributor acquisition strategy, the successful launch of new products in China and improved results in our Power Generation Business all contributed to earnings growth in the first quarter. Strong performance in these areas more than offset the impact of weak demand in a number of international markets.” said Cummins Chairman and CEO Tom Linebarger. “We expect profitability for the remainder of the year to increase from first quarter levels as revenues improve and we capture more benefits from cost reduction activities. During the quarter, we returned $277 million to shareholders in the form of dividends and share repurchase, consistent with our plans to return 50 percent of full year operating cash flow.”
Based on the current forecast, Cummins expects full year 2015 revenues to grow between two and four percent, and EBIT to be in the range of 13.5 to 14 percent of sales.