UPDATE 2-Cummins 1st-qtr net profit rises 33 pct
April 30th, 2008 | by admin |(Adds share reaction, analyst comment, details on enginemarket share gains, changes dateline from NEW YORK)
CHICAGO, April 30 (Reuters) - Cummins Inc (CMI.N: Quote, Profile, Research), a U.S.maker of engines and power generators, reported a 33 percentjump in quarterly earnings on Wednesday as strongerinternational demand helped offset rising commodity prices.
The better-than-expected results, which were driven bystrong sales of medium-duty truck and bus engines, sent thecompany’s shares surging more than 11 percent in early tradingon the New York Stock Exchange.
Cummins also reported big gains in market share in NorthAmerica for both its heavy- and medium-duty on-highway dieselengines — gains that most likely come at the expense of rivalCaterpillar Inc (CAT.N: Quote, Profile, Research), which has acknowledged in recentmonths that it faces “an important decision on the future” ofits on-highway engine business.
Cummins reported a first-quarter net profit of $190million, or 97 cents per share, compared with $143 million, or71 cents per share, in the same period in 2007.
Analysts on average had expected Cummins to report a profitof 89 cents a share, according to Reuters Estimates. PeterNesvold, an analyst at Bear Stearns, said the results were alsolifted by impressive margin improvements and called thebetter-than-expected numbers “a clean beat.”
Sales at the Columbus, Indiana-based company rose 23percent to $3.47 billion, ahead of estimates of $3.33 billion.International markets accounted for 57 percent of totalrevenue.
Cummins acknowledged that it was feeling the effects of theU.S. economic slowdown, noting that sales of engines forpick-up trucks and power generation equipment for recreationalvehicles in North America all declined during the quarter.
But that weakness was more than offset by sales of enginesto commercial marine customers and power generation equipmentsales in Europe, India and the Middle East.
