Cummins, Inc., on Tuesday reported its results for the second quarter of 2017.
The company says second quarter revenues of $5.1 billion increased 12 percent from the same quarter in 2016. Cummins says higher demand for trucks and construction equipment in North America and China, and stronger sales to mining, and oil and gas customers were the main drivers of revenue growth. Currency negatively impacted revenues by approximately 1 percent compared to last year, primarily due to the appreciation of the US dollar. Revenues in North America increased 13 percent and international sales grew 11 percent due to strong demand in China and India.
Net income attributable to Cummins in the second quarter was $424 million ($2.53 per diluted share), compared to $406 million ($2.40 per diluted share) in the same quarter a year ago. The tax rate in the second quarter of 2017 was 26.4 percent.
Additionally, Cummins says earnings before interest and taxes (EBIT) was $620 million, or 12.2 percent of sales, compared to $591 million or 13.1 percent of sales a year ago.
“We delivered strong revenue growth in all four operating segments in the second quarter due to improving conditions in a number of important markets where we also have leading share. Earnings increased due to solid operational performance, partially offset by higher warranty costs that resulted in second quarter EBIT that was below our expectations” says Chairman and CEO Tom Linebarger. “As a result of stronger than expected orders in truck and construction markets in North America and China, and improving demand from global mining customers we have raised our 2017 full year outlook.”
Through the end of the second quarter, the company says it has returned $463 million to shareholders in the form of dividends and share repurchase and recently raised its quarterly cash dividend by 5.4 percent. Cummins plans to return 50 percent of its Operating Cash Flow to shareholders in 2017.
Based on the current forecast, Cummins says it expects full year 2017 revenues to be up 9 to 11 percent, higher than the prior forecast of up 4 to 7 percent. EBIT is expected to be in the range of 11.75 to 12.5 percent of sales, unchanged from prior guidance. This forecast excludes the impact of our new Eaton Cummins Automated Transmission Technologies joint venture, the company adds.