Cummins Inc. Fourth Quarter Report Beats Sales And Revenue Forecasts

On 5th February, Cummins Inc. announced its fourth quarter earnings report. The company smashed analyst’s expectation of sales and revenue.

Cummins Inc. (NYSE:CMI) stated, as the international market of engine makers are tumbling. The new regulations on exhaust engines and its extended engine lines are pushing its sales in China.

The company surpassed fourth quarter sales and profit estimations, but have a lower than expected view for the current year 2015, as it only relies on the sales in china and north America balancing the lower demand in  other markets.

According to Pat Ward, Chief Financial Officer told analysts that, “The united states and China will be the biggest determining factor of growth in sales this year.”

For the quarter covering from October to December 2014, the company posted total earnings of $444 million equal to $2.44 earnings per share compared to $2.32 in the similar quarter last year. Revenue grew by 11% to $5.09 billion beating analyst’s expectation of %5.02 billion. Exclusive of onetime restructuring expenses, EPS were $2.56 more than analysts’ projections of $2.51 per share.

For the complete year of 2014, company’s earnings per share increased by 21.4% to $9.13 from $7.52 in 2013 beating analyst consensus. The improved performance was due to well performance in component distribution business and more earnings in the engine business.

Total revenues in 2014 went up by 11% to $19.2 billion more than Zacks estimation of $19.1 billion. This is due to the acquisition company made in 2014.  Revenues from North America rose by 20% on annual basis. Furthermore, international market revenues improve by 2% due to strong demand in China, somewhat balanced by weak sales in India and Brazil.

Norman Thomas Linebarger, Chief Executive Officer and Chairman of the company said, “There is a lot of excitement in China related to our new heavy-duty engines with volumes is likely to grow all over the year.”

Cummins Inc. estimated an increase in its china revenue by 15% this year, after a record 13% increase in 2013. The company stated that its small engine sales to Beiqi Foton Motors Co. Chinese truck maker rose by 78% the previous year.

Cummins Inc. (NYSE:CMI) stock quote is down by 1.63%, with stock price $135.86 at market close on Friday, with 30-days mean volume of 1.78 million shares. The Columbus based engine company has a 52-week low of 124.30, and a 52-week high of $161.03, with market cap of $25.11 billion and price to earnings ratio of 15.27.

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