Summary
Cummins Inc. reported a strong second quarter and first half of 2011, driven by a significant recovery in North American on-highway markets and continued robust growth in emerging markets. Net sales for the second quarter of 2011 reached $4.64 billion, a 45% increase compared to the prior year, with diluted EPS rising to $2.60 from $1.25. For the first half of the year, net sales grew 50% to $8.50 billion, and diluted EPS more than doubled to $4.34. The company benefited from improved demand across all segments, including Engine, Power Generation, Components, and Distribution. Profitability was further boosted by improved gross margins and a gain on the sale of the exhaust business. Cummins also generated substantial operating cash flow and continued to return capital to shareholders through dividends and share repurchases, while maintaining a strong balance sheet and credit rating.
Financial Highlights
52 data points| Revenue | $4.64B |
| Cost of Revenue | $3.44B |
| Gross Profit | $1.20B |
| R&D Expenses | $157.00M |
| SG&A Expenses | $463.00M |
| Operating Income | $768.00M |
| Interest Expense | $13.00M |
| Net Income | $505.00M |
| EPS (Basic) | $2.61 |
| EPS (Diluted) | $2.60 |
| Shares Outstanding (Basic) | 193.80M |
| Shares Outstanding (Diluted) | 194.40M |
Key Highlights
- 1Net sales for Q2 2011 surged by 45% year-over-year to $4.64 billion, reflecting broad market recovery, particularly in North American on-highway markets.
- 2Diluted EPS more than doubled to $2.60 in Q2 2011, up from $1.25 in Q2 2010, indicating significant operational leverage and profitability improvement.
- 3All operating segments (Engine, Power Generation, Components, Distribution) experienced substantial sales growth, demonstrating the widespread positive market trends.
- 4Gross margins improved significantly, expanding by 2.4 percentage points in Q2 2011 to 25.9% of sales, driven by higher volumes and pricing.
- 5The company generated $744 million in operating cash flow for the first half of 2011, a substantial increase from $427 million in the prior year, strengthening liquidity.
- 6Cummins repurchased $373 million of its common stock in the first six months of 2011 under its enhanced share repurchase program, returning capital to shareholders.
- 7The company announced an increase in its quarterly dividend to $0.40 per share, signaling confidence in its financial health and future performance.