Cummins Revenue Grows 7% on North America Demand

   By Angela Chen 
 

Manufacturing company Cummins Inc. said its first-quarter revenue grew 7% largely because of demand in North America.

Results were in line with expectations.

Cummins had benefited from steady, if lukewarm, economic growth, as it has gained share in key markets such as buses and medium-duty trucks. Still, it has remained cautious about its margin outlook, particularly as international sales have been dragging on results.

Cummins's power-generation equipment business has continued to face weak demand. It had earlier prompted the company to consider a cost-cutting plan for the current quarter, with potential reductions pegged to a range of $15 million to $40 million. In the recently ended quarter, power-generation sales rose 6% to %680 million as higher revenue in Asia, Africa and the Middle East offset weaker demand in Eastern Europe.

Overall, for the period ended March 29, the company posted earnings of $387 million, or $2.14 a share, up from $338 million, or $1.83 a share, during last year's period.

Revenue improved 7% to $4.7 billion, even though currency headwinds hurt sales by 3%.

Analysts surveyed by Thomson Reuters projected per-share earnings of $2.14 and revenue of $4.55 billion.

Cummins said international sales fell 6% despite growth in China. The North American market posted a 17% sales gain.

Engine sales rose 1% to $2.6 billion.

Shares of Cummins, inactive premarket, have been down about 3.4% this year through Monday's close.

Write to Angela Chen at [e-mail]

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