Cummins reported first quarter of 2018 revenues of $5.6 billion with a prediction that full year revenues are expected to increase 10 to 14 percent. Strong demand for trucks, construction and mining equipment drove the majority of the revenue increase. Currency favorably impacted revenues by 2 percent, primarily due to a weaker U.S. dollar.
Sales in North America improved by 22 percent while international revenues increased by 20 percent led by strong growth in Europe, Latin America, China and India.
“Improving demand in a number of the company’s core markets, combined with our strong global market share and the success of new products aimed at lowering emissions, resulted in sales growth of 21 percent in the first quarter,” said Chairman and CEO Tom Linebarger.
During the first quarter, the Company recorded a pre-tax charge of $187 million for the expected costs of a product campaign – a proactive plan to address the performance of an aftertreatment component in certain on-highway products produced between 2010 and 2015 in North America.
Net income attributable to Cummins in the first quarter was $325 million, compared to $396 million. First quarter results included $78 million in discrete tax charges, primarily related to U.S. tax reform. Excluding the discrete tax charges, net income attributable to Cummins in the first quarter was $403 million, reflecting a 23 percent tax rate.
“Cummins delivered solid operating performance in the first quarter led by strong incremental margins in the Power Systems segment,” said Linebarger. “As a result of rising demand and continued benefits from cost reduction initiatives, we have raised our full year outlook for sales and EBITDA.”
Based on the current forecast, Cummins expects full year 2018 revenues to be up 10 to 14 percent, compared to prior guidance of up 4 to 8 percent.