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Friday, March 29
The Indiana Daily Student

Cummins Inc. swings to $33 million profit

COLUMBUS, Ind. -- Cummins Inc. said Thursday strong sales of its diesel engines helped it swing to a $33 million profit in the first quarter after posting a $31 million loss in the same period a year ago.\nCummins also boosted its earnings forecast for the second quarter and for the full year, citing a rebound in truck sales after a three-year slump in a down economy. The increase in the company's full-year forecast was the second such upward adjustment of the company's guidance this month.\n"After experiencing some of the most challenging years in our company's history, it is gratifying to see these very positive results," said Tim Solso, chairman and chief executive of Columbus-based Cummins.\nThe company reported net income for the January through March period of 79 cents per share as sales reached $1.77 billion, up 28 percent from $1.39 billion a year ago. The performance compared with a loss of 79 cents a share a year earlier.\nAnalysts surveyed by Thomson First Call had expected, on average, earnings of 72 cents a share in the latest quarter.\nCummins boosted its earnings forecast April 6 for the first quarter to a range of 65 cents to 75 cents per share, and increased full-year expectations to $4 to $4.20 per share.\nThursday it boosted the full-year forecast to a profit of $4.40 to $4.60 per share. It also increased its second quarter forecast to a profit of $1.20 to $1.30 a share, up from the company's previous guidance of $1 to $1.10.\nCummins shares closed down 50 cents at $64.39 on the New York Stock Exchange.\nThe company's shares have tripled in price over the last year and a half and are trading at their highest level since 1999. The national recession had reduced demand for the company's engines, and Cummins' shares bottomed out at about $20 apiece in the fall of 2002. The stock has made a steady climb since then.\nSolso said all four of Cummins' operating segments -- engine, power generation, filtration and international distribution -- posted profits for the second consecutive quarter.\nCummins expects the North American heavy truck market to grow more than 30 percent this year.\nWith 24,000 employees worldwide, Cummins manufactures diesel engines, electrical power generators and related technologies including air filtration equipment. Major rivals include Caterpillar, Detroit Diesel and Mack Trucks. Cummins ranks No. 296 on the recently released Fortune 500 list of largest U.S. companies, with $6.3 billion in revenue last year.

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