Cummins Q2 revenue up 4% Profit margin 30%
Cummins recently announced its second quarter 2015 financial report. Benefiting from the North American market last quarter, the company’s operating income and EBIT increased, and its four major business segments all increased.
Cummins Q2 revenue up 4% Profit margin 30%
In the second quarter of this year, Cummins’ operating income reached US$5.015 billion, an increase of 4% over US$4.835 billion in the same period of last year. EBIT also increased by 14.4% year-on-year to US$721 million, compared to US$657 million in the same period of last year. In the first half of the year, operating income increased by 5.0% year-on-year to US$9.724 billion compared with US$9.24 billion in the same period of last year; EBITDA reached US$1.283 billion, an increase of 13.2% from US$1.185 billion in the same period last year.
Cummins pointed out that compared with the same period of last year, revenue growth in the second quarter of this year was mainly driven by the North American market and the acquired distribution business.
In the previous quarter, Cummins’ net profit was US$471 million, compared with US$446 million in the same period of last year, a slight increase of 0.35% year-on-year. The profit margin was 29.5%, up 0.4% from 25.4% in the first quarter of last year. In the first half of the year, its net profit was US$858 million, an increase of 8.6% from the same period last year to US$784 million. Its financial report points out that the increase in profitability is mainly due to the increase in sales and the decrease in material costs, which can partially offset the impact of higher guarantee period costs and exchange rate fluctuations.
Among all business units, engine sales increased by 2% from the previous quarter to US$2.8 billion in the previous quarter, and increased by 2% year-on-year to US$5.393 billion in the first half of the year; distribution sales reached US$1.5 billion in the previous quarter. The year-on-year increase of 21% was US$2.971 billion in the first half of the year, a year-on-year increase of 26%. Cummins said that the growth of the Distribution Division was mainly driven by the growth of its business acquisitions.
Sales of Parts and Components Business Units increased by 9% to US$1.4 billion in the second quarter of this year from US$1.28 billion in the same period of last year; sales in the first half of the year increased by 7% to US$2.696 billion compared to US$ 2.510 billion in the same period last year , mainly driven by the growth of North American and Chinese markets.
Power Generation sales also increased by 1% year-on-year, from US$743 million in the same period last year to US$7.47 billion; in the first half of this year, sales of the Division were US$1.427 billion, compared to US$1.382 billion in the same period of last year, representing a year-on-year increase. It is 3.2%. This sector was mainly driven by higher sales in the Middle East, Asia Pacific, and India. The growth in these regions offset the decline in North American sales.
Regarding the financial outlook for the full year this year, Cummins believes that operating income will increase by 2% to 4%, and EBIT will achieve a growth of 13.5% to 14.0%.
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