Engine maker Cummins Inc. (CMI: Quote) on Tuesday reported a 20 percent increase in profit for the first quarter from last year, driven by strong revenue growth in North America that helped offset weakness in international markets. Revenue for the quarter beat analysts' estimates. Looking ahead, the company raised its outlook for fiscal 2014 revenue growth.
Net income attributable to the Columbus, Indiana-based company for the first quarter was $338 million or $1.83 per share, up from $282 million or $1.49 per share for the year-ago quarter. On average, 25 analysts polled by Thomson Reuters expected the company to earn $1.67 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the for the quarter rose 12 percent to $4.41 billion from $3.92 billion in the prior-year period. Analysts had a consensus revenue estimate of $4.18 billion for the quarter.
The increase year-over-year was driven by stronger demand in on-highway markets and distributor acquisitions in North America.
Revenues in North America for the quarter increased 25 percent, while international sales were flat compared to the year-ago period. Within international markets, weakness in India, Australia, Mexico and Brazil offset higher revenues in China and Europe.
Sales at the company's engine segment grew 11 percent to $2.56 billion, while component segment sales rose 21 percent to $1.23 billion, and distribution segment sales rose 22 percent to $950 million. But sales at the company's power generation segment declined 14 percent to $639 million.
Looking ahead to fiscal 2014, Cummins now forecasts revenues to grow between 6 percent and 10 percent, up from the prior range of between 4 percent and 8 percent. The revised outlook is due largely to improving demand in North America. Analysts currently expect full-year revenue to increase 7.50 percent to $18.60 billion.
Cummins shares are currently trading at $149.75, up $4.55 or 3.13 percent on a volume of 1.13 million shares.
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by RTT Staff Writer
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