Cummins Q2 Profit Rises - Update

(RTTNews) - Engine maker Cummins Inc. (CMI), Thursday reported an increase in profit for the second quarter, on improved revenues and curbs is manufacturing costs. Both earnings and revenue for the quarter trumped Wall Street estimates.

Columbus, Indiana-based Cummins' second-quarter profit improved to $471 million or $2.62 per share from $446 million or $2.43 per share last year. On average, 25 analysts polled by Thomson Reuters expected earnings of $2.55 per share for the quarter. Analysts' estimates typically exclude special items.

Cummins revenue grew 4 percent to $5.0 billion from $4.84 billion from a year ago. Analysts had a consensus revenue estimate of $4.94 billion for the quarter.

The company said sales growth was driven largely by stronger demand in on-highway markets and distributor acquisitions in North America. Currency negatively impacted revenues by 4 percent compared to last year, primarily due to a stronger US dollar.

Revenues in North America increased 12 percent while international sales declined by 6 percent, as sales in Brazil fell the most due to a weak economy.

"We delivered strong results in the second quarter, despite challenging economic conditions in a number of international markets, and we increased cash returned to shareholders," said CEO Tom Linebarger. "Earnings improved as a result of good performance by our manufacturing and supply chain organizations and solid execution on material cost reduction initiatives.

Looking forward, Cummins continues to expect full-year 2015 revenues to grow between 2 and 4 percent, and EBIT in the range of 13.5 to 14.0 percent of sales.

CMI is currently trading at $128.52, up $4.74 or 3.83%, on the NYSE.