Cummins has reported results for the third quarter of 2018, showing revenues of $5.9 billion, an increase of 12 percent from the same quarter in 2017. The company delivered growth in most major markets as demand for trucks, construction, and power generation equipment, it reported. Currency negatively impacted revenues by 1 percent, primarily due to a weaker Brazilian Real.
Sales in North America improved by 17 percent while international revenues increased by 6 percent led by growth in India, China, Latin America, and Europe.
“We delivered record earnings this quarter due to increased demand in a number of key markets, growth in our market share and the benefits of cost reduction initiatives,” said Tom Linebarger, chairman and CEO. “We have completed our previously announced $500 million accelerated share repurchase plan and our board of directors recently authorized a new $2 billion share repurchase plan, which reflects our confidence in our long-term performance. Year-to-date, we have returned $1.4 billion to shareholders in the form of dividends and share repurchase, consistent with our plan to return 75 percent of operating cash flow in 2018.”
Earnings before interest, taxes, depreciation and amortization in the third quarter were $983 million, or 16.5 percent of sales, up from $788 million or 14.9 percent of sales a year ago.
Net income attributable to Cummins in the third quarter was $692 million, compared to net income of $453 million. Third quarter results were positively impacted by $37 million in discrete tax items, of which $34 million was related to U.S. tax reform. Excluding these items, net income attributable to Cummins in the third quarter was $655 million.
The company now expects its 2018 effective tax rate to be 21 percent, excluding discrete items, compared to the prior guidance of 23 percent.
Sales in Cummins’ engine segment were $2.7 billion, up 17 percent from the same period last year.
