Cummins powers on

US DIESEL engine manufacturer Cummins remains on track to expand its global revenues by nearly 25% and double earnings in 2004-05 after recording

Richard Roberts

Attaching the "remarkable" tag to Cummins' September quarter numbers, stockbroker Credit Suisse First Boston said the company's results were substantially above expectations.

"Markets are strong across the board and the (company's) incremental operating margins are running about 20%," said the broker's research team.

Engine sales were up 53% on the same time last year, while Cummins' power generation business area posted 38% stronger sales and filtration business sales climbed 45% higher.

CSFB believes Cummins can eliminate its $US1 billion of net debt by the end of 2007 unless it "ramps" dividend payments, with a constant stream of "really impressive" cashflow anticipated over the next 2-3 years.

The broker is projecting total Cummins revenues of $US9.02 billion in calendar 2005, and earnings before interest, tax and depreciation of $US932 million for the period.

Cummins’ design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems.