Industry News

Cummins Bullish On Global Markets

March 16, 2010

After the economic turmoil of 2009, many companies in the industry are forecasting only modest improvements over the next few years. And then there’s Cummins. Speaking to Wall Street investors in New York, the Columbus, Ind.-headquartered manufacturer of engines and engine system components presented a singularly optimistic outlook for the years ahead.

How optimistic? The company’s senior leadership said that it expected a period of significant growth starting in 2011. Cummins has a target of $20 billion sales with earnings before interest and taxes (EBIT) of 12.5% of sales in 2014. The company also said it expects to surpass its previous peak sales and earnings, set in 2008, in 2012.

"We still have some challenges ahead of us, especially in the first half of this year, but I am extremely optimistic about the future," said Tim Solso, Cummins chairman and chief executive officer. "We are in the best financial condition in the company's history and have an experienced leadership team that knows what it takes to successfully manage the company during both difficult times and times of significant growth.”

Cummins cited several specific reasons for its optimism, including its engine and component technology; its competitive position in large and growing international markets such as China, India and Brazil; its worldwide distribution network; and increased infrastructure investment in many developing countries, which it said would bolster engine and power generation demand in many markets. Cummins currently has 56 joint ventures in 18 countries and owns a financial stake in 85% of its global distribution network.