Cummins Inc, USA

Cummins Inc, USA

Company WATCH Parker Hannifin Corp, USA Cummins Inc, USA Key Figures (US$ million) First quarter ended 29.3.2015 30.3.2014 Net Sales Of Which: Co...

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Company WATCH

Parker Hannifin Corp, USA

Cummins Inc, USA

Key Figures (US$ million) First quarter ended 29.3.2015 30.3.2014

Net Sales Of Which: Components Distribution

4709

4406



Key Figures (US$ million) Third quarter ended 31.3 2015 2014 3162.3

3358.4

1299 1230 1476 950

Net Sales Of Which: Industrial North America Industrial International

1441.6 1148.2

1455.2 1357.5

Cost of Sales

3514

3307

Cost of Sales

2373.0

2605.9

Gross Margin

1195

1099

Gross Profit

789.3

752.5

Operating Income

548

513

448.3

433.9

Segment EBIT Of Which: Components Distribution

562

528

195 167 88 76

Operating Income Of Which: Industrial North America Industrial International

235.5 139.5

243.0 126.9

Net Income

285.5

242.4

Income before Income Taxes

548

511

Net Income

404

358

COMMENT Cummins Inc has posted first quarter fiscal 2015 sales of US$4.7 billion, up 6.9% on the year earlier. Net income was 12.8% stronger at US$404 million. The company’s Components segment saw sales increase 5.6% on the 2014 comparator to US$1.3 billion, although filtration revenues registered a decrease falling 3.8% to US$255 million. Segment profitability was also up, lifting 16.8% to US$195 million. Cummins said the growth reflected higher demand from on-highway markets in North America and China. In Cummins’ Distribution segment revenues surged 55.4% on a year earlier to US$1.5 billion with sales in its Parts & Filtration business unit increasing 50.0% to US$573 million. The higher revenues were primarily driven by acquisitions and stronger demand in Asia Pacific, partially offset by the negative impact of currency movements. Segment EBIT was up 15.8% on the year earlier at

May 2015

US$88 million, and included US$8 million of amortization of intangibles related to prior year acquisitions. “Record profitability in our Components Segment, execution of our distributor acquisition strategy, the successful launch of new products in China and improved results in our Power Generation business all contributed to earnings growth in the first quarter,” Cummins chair and CEO, Tom Linebarger, said. “Strong performance in these areas more than offset the impact of weak demand in a number of international markets,” he said. “We expect profitability for the remainder of the year to increase from first quarter levels as revenues improve and we capture more benefits from cost reduction activities.” Cummins is now forecasting full year 2015 revenues to grow between 2 and 4%, and EBIT to be in the range of 13.5 to 14.0% of sales. n www.cummins.com



Nine months ended 31.3 2015 2014

Net Sales Of Which: Industrial North America Industrial International

9567.2

9690.6

4302.6 3599.1

4168.5 3905.2

Cost of Sales

7234.5

7502.3

Gross Profit

2332.8

2188.3

Operating Income Of Which: Industrial North America Industrial International

1397.9

1278.7

726.6 465.8

677.8 434.5

832.7

740.0

Net Income

COMMENT Parker Hannifin has posted third quarter fiscal 2015 sales of US$3.2 billion, a decrease of 5.8% on the year earlier. Net income, however, was up, climbing 17.8% to US$285.5 million. In the firm’s Industrial segment, North American sales were down 0.9% to US$1.4 billion and operating income was 3.1% easier at US$235.5 million, while International sales fell 15.4% to US$1.1 billion although operating income in the business unit was up 9.9% at US$139.5 million. For the corresponding nine month period net sales were 1.3%

lower at US$9.6 billion, while net income strengthened 12.5% to US$832.7 million. “We performed well in the face of an increasingly challenging macro-economic environment, including weakness in key end markets, as well as the significant strengthening of the US dollar,” Tom Williams, Parker’s CEO, said. “Segment operating margins were 14.2%, reflecting the benefits of our restructuring activities and the adaptability of our businesses to changing market conditions.” n www.parker.com

Filtration Industry Analyst

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