Cummins Reports Results for the First Quarter of 2013, Maintains Full Year Guidance for Revenues and EBIT
- First quarter revenues of $3.9 billion and EBIT 11.1 percent of sales
- Continues to expect full year revenues to be flat to down 5 percent
- Maintains full year EBIT guidance to be in the range 13 to 14 percent of sales
COLUMBUS, Ind.- Apr. 30, 2013-- Cummins Inc. (NYSE: CMI) today reported results for the first quarter of 2013.
First quarter revenues of $3.9 billion decreased 12 percent from the first quarter of 2012. Revenues in North America declined by 15 percent and international revenues declined by 10 percent as the Company experienced weaker demand in most major geographies and end markets.
Earnings before interest and taxes (EBIT) were $437 million or 11.1 percent of sales, compared to $658 million or 14.7 percent of sales a year ago.
Net income attributable to Cummins in the first quarter was $282 million ($1.49 per diluted share), compared to $455 million ($2.38 per diluted share) in the first quarter of 2012.
The most significant decline in demand occurred within the Engine Business, with total unit volumes down 18 percent year-over-year. Shipments of high horsepower engines declined by 24 percent due to weakness in mining, oil and gas and power generation markets.
“As anticipated, we experienced weak demand in the first quarter in many of our major markets,” said Chairman and CEO Tom Linebarger. “While uncertainty remains in a number of markets, we expect that the first quarter will mark the low point of the year for Company revenues. We expect moderately improving order trends in on-highway and construction markets in North America to be the most significant drivers of improvement in revenues going forward. We continue to make investments in our distribution system and in new products as we remain focused on future profitable growth.”
Based on the current forecast, the Company expects full year revenues to be flat to down 5% and EBIT to be in the range of 13 to 14 percent of sales.
Recent highlights include:
- Cummins was named to the Ethisphere Institute’s list of the World’s Most Ethical Companies for a sixth consecutive year.
- Moody’s Investors Service agency announced that it has raised the unsecured rating of Cummins to A3.
- FORTUNE magazine named Cummins one of America’s Most Admired Companies.
- Cummins announced that the next-generation QSB4.5 engine will meet Tier 4 Final near-zero emissions standards with increased horsepower and a higher peak torque.
- Cummins Westport announced that it has received certification for its ISX12 G (natural gas) engine from the U.S. Environmental Protection Agency.
- Cummins launched the QSM12, a 12L heavy-duty engine for off-highway applications that meets US Tier 4 Final and EU stage IV near-zero emissions regulations.
- Industrial manufacturer Eaton and Cummins unveiled a new powertrain package for the North American heavy-duty truck market that is expected to deliver a fuel economy improvement of three to six percent.
- The first L9.3 engine rolled off the production line at Guangxi Cummins Engine Company Limited in Liuzhou, southern China, a joint venture between Cummins and LiuGong Machinery.
First quarter detail (all comparisons to same period in 2012)
Engine Segment
- Sales – $2.3 billion, down 19 percent
- Segment EBIT – $195 million, or 8.5 percent of sales, compared to $381 million or 13.3 percent of sales
- Lower demand in North American heavy duty truck, oil and gas, and bus markets and global mining were the most significant drivers of the lower revenues
- Demand increased modestly in North America, Latin America and Korea for engines for agricultural applications
Components
- Sales - $1.0 billion, a decrease of 7 percent
- Segment EBIT - $119 million, or 11.7 percent of sales, compared to $143 million or 13.0 percent of sales
- Lower revenues primarily related to lower on-highway demand in North America
Power Generation
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Sales – $746 million, down 4 percent
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Segment EBIT – $51 million, or 6.8 percent of sales, compared to $76 million or 9.7 percent of sales
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Lower demand in Europe, Brazil and China offsetting stronger revenues in North America, India and Africa
Distribution
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Sales – $778 million, down 11% excluding acquisitions
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Segment EBIT – $95 million, or 12.2 percent of sales, compared to $94 million or 12.1 percent of sales
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Reduction in revenues due to weaker demand in the construction market in Europe, the oil and gas market in North
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America and a reduction in orders for power generation in Asia Pacific and the Middle East