- Fourth quarter revenues of $4.6 billion, EBIT of 12.3 percent of sales
- 2013 revenues of $17.3 billion, EBIT of 12.5 percent of sales
- Expects 2014 revenue to grow between 4 and 8 percent and EBIT to be in the range of 12.75 to 13.25 percent of sales
- Plans to return 50 percent of Operating Cash Flow to shareholders in 2014
Cummins Inc. (NYSE: CMI) today reported results for the fourth quarter and full year 2013.
Fourth quarter revenue of $4.6 billion increased 7 percent from the same quarter in 2012. The increase year-over-year was driven by higher revenues in North America, China and Brazil partially offset by weaker sales in Mexico, India and Australia.
Earnings before interest and taxes (EBIT) were $566 million for the fourth quarter or 12.3 percent of sales. This compares to$532 million or 12.4 percent of sales a year ago, excluding restructuring costs.
Net income attributable to Cummins in the fourth quarter was $432 million ($2.32 per diluted share), compared to $404 million($2.14 per diluted share) in the fourth quarter of 2012 excluding restructuring charges. The effective tax rate in the fourth quarter of 2013 was 15.7 percent and reflects one-time benefits of $0.18 per diluted share, and a lower than expected operating rate in the fourth quarter that contributed $0.20 per diluted share.
Revenues for the full year were $17.3 billion, flat with 2012. Revenues in North America increased 3 percent but were offset by international sales which declined by 4 percent. Within international markets declines in Mexico, India, Australia and Europeoffset growth in China and Brazil.
EBIT for the year was $2.16 billion or 12.5 percent of sales, compared to $2.35 billion or 13.6 percent of sales in 2012, excluding special items.
Net income attributable to Cummins for the full year was $1.48 billion ($7.91 per diluted share), down from $1.68 billion ($8.83per diluted share) in 2012, excluding special items.
“We faced weak demand in important regions and end markets in 2013,” said Tom Linebarger, Chairman and CEO. “Revenues for the year ended flat with 2012 as strong growth in the Components business, market share gains in the North American medium-duty truck market and distributor acquisitions offset weakness in global mining markets, international power generation and the North American heavy-duty truck market. I am pleased that in this environment of weak global growth, we were able to generate record cash flow from operations that allowed us to continue to invest in the business and increase the cash returned to shareholders by 34 percent in 2013. We expect revenues to grow between 4 percent and 8 percent in 2014, with earnings projected to grow faster than revenues and we expect to return to shareholders an amount of at least 50 percent of cash from operations.”
Based on the current forecast, Cummins expects full year 2014 revenues to grow between 4 percent and 8 percent, with EBIT in the range of 12.75 – 13.25 percent of sales.
2013 highlights:
- The Company was named the 2013 Newsmaker of the Year award from Diesel Progress North American magazine for introducing a broad range of on- and off-highway engines and power systems
- The Company increased its dividend by 25 percent in the third quarter
- For the sixth consecutive year, Cummins has been named one of the world’s most ethical companies by The Ethisphere Institute
- The Company repurchased 3.3 million shares in 2013
- Cummins was named one of the Top 50 companies for diversity by DiversityInc for the seventh consecutive year
Fourth quarter 2013 detail (all comparisons to same period in 2012)
Segment results and comparisons below exclude special items in 2012
Engine Segment
- Sales — $2.6 billion, up 2 percent
- Segment EBIT — $235 million, or 9.2 percent of sales, compared to $272 million or 10.9 percent of sales
- Strong demand for construction equipment in international markets and increased demand for medium duty trucks in North America offset weakness in global mining markets and lower demand in the North American bus market
Components Segment
- Sales — $1.1 billion, up 21 percent
- Segment EBIT — $140 million, or 12.3 percent of sales, compared to $84 million or 8.9 percent of sales
- Higher demand in on-highway markets in North America, Europe and China
Power Generation Segment
- Sales — $759 million, down 1 percent
- Segment EBIT — $46 million, or 6.1 percent of sales, compared to $54 million or 7.1 percent of sales
- Lower revenues in Europe and India offset increased demand in North America and the Middle East
Distribution Segment
- Sales — $1.1 billion, up 18 percent, up 3 percent excluding acquisitions
- Segment EBIT — $107 million, or 10.0 percent of sales, compared to $98 million or 10.8 percent of sales
- Higher revenues were primarily driven by acquisitions and stronger demand for power generation equipment and parts and service in the US
