Cummins this week reported for the second quarter its highest quarterly earnings as a percentage of sales in more than 25 years.
Sales of $3.21 billion in the second quarter were 32 percent higher than its $2.43 billion in the same quarter in 2009. Net income attributable to Cummins in the second quarter more than quadrupled, to $246 million, or $1.25 a share, from $56 million, or 28 cents a share, in the same period a year earlier.
The sales gains were led by the Columbus, Ind.-based company's engine and components segments. Each reported 45 percent sales improvements from the same period in 2009.
Earnings before interest and taxes were $401 million, or 12.5 percent of sales, up from $109 million, or 4.5 percent of sales, in the second quarter of 2009. It also improved from 10.7 percent in the first quarter of 2010. For the first time, all four segments posted quarterly earnings before interest and taxes in excess of 10 percent of sales.
Based on the company's performance in the first half of 2010 and its forecast for the rest of the year, Cummins increased its financial guidance for 2010. The company now expects to generate earnings of 12 percent of sales on revenues of $13 billion.
"We had an outstanding quarter," chairman and CEO Tim Solso said in a statement. "The work we have done to strengthen our manufacturing operations during the downturn has resulted in significant productivity gains and we continue to benefit from our leadership position in large and growing international markets, such as China, India and Brazil."