Summary
Cummins Inc. (CMI) reported net sales of $4.62 billion for the third quarter of 2015, a 6% decrease compared to the same period in the prior year. This decline was primarily driven by unfavorable foreign currency fluctuations, weaker global industrial and international on-highway demand, and a slowdown in global power generation markets. Despite the revenue dip, the company's net income attributable to Cummins Inc. was $380 million, or $2.14 per diluted share, a decrease from $423 million, or $2.32 per diluted share, in the prior year quarter. For the nine-month period ended September 27, 2015, net sales increased by 2% to $14.34 billion, with net income attributable to Cummins Inc. rising to $1.24 billion, or $6.90 per diluted share, from $1.21 billion, or $6.58 per diluted share in the prior year. The company highlighted improved gross margins, a lower effective tax rate, and reduced R&D expenses as key drivers for the year-to-date profit growth, though this was partially offset by currency headwinds and increased SG&A expenses. Management announced plans to reduce its global professional workforce by up to 2,000 employees to respond to lower product demand.
Financial Highlights
52 data points| Revenue | $4.62B |
| Cost of Revenue | $3.41B |
| Gross Profit | $1.21B |
| R&D Expenses | $197.00M |
| SG&A Expenses | $530.00M |
| Operating Income | $557.00M |
| Interest Expense | $16.00M |
| Net Income | $380.00M |
| EPS (Basic) | $2.15 |
| EPS (Diluted) | $2.14 |
| Shares Outstanding (Basic) | 177.00M |
| Shares Outstanding (Diluted) | 177.40M |
Key Highlights
- 1Third quarter 2015 net sales decreased 6% year-over-year to $4.62 billion, impacted by unfavorable foreign currency, weaker industrial and international demand.
- 2Net income attributable to Cummins Inc. for Q3 2015 was $380 million ($2.14/share), down from $423 million ($2.32/share) in Q3 2014.
- 3Nine-month 2015 net sales increased 2% year-over-year to $14.34 billion.
- 4Nine-month 2015 net income attributable to Cummins Inc. increased to $1.24 billion ($6.90/share) from $1.21 billion ($6.58/share) in the prior year, driven by improved gross margin and a lower tax rate.
- 5The company announced a plan to reduce its worldwide professional workforce by up to 2,000 employees, expecting a Q4 pre-tax charge of $70-$90 million.
- 6Distribution segment sales increased 20% in Q3 2015 due to the consolidation of North American distributors.
- 7The company increased its quarterly dividend by 25% to $0.975 per share in July 2015.