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North American growth propels Cummins' profit

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Cummins Inc.'s profit jumped 33 percent in the first quarter due to strong demand for its engines in the North American market, the Columbus-based manufacturer said Tuesday morning.

Profit rose to $455 million, or $2.38 cents per share, compared to $343 million, or $1.75 per share, in the same quarter a year ago.

The company’s earnings came from $4.5 billion in sales, a 16-percent increase over the same quarter in 2011.

Cummins' results beat analyst expectations of $2.22 per share and $4.4 billion in revenue.

The company has seen double-digit year-over-year percentage growth in revenue for five straight quarters, it said. Earnings have risen in three straight quarters.

Cummins said its growth was driven by higher demand in truck, power-generation and construction markets in North America.  The company also saw growth in global mining markets.

Cummins said that growth offset weaker demand in the Brazilian truck market, Chinese construction market, and the European construction and power-generation sectors.

"Cummins continues to benefit from its geographic diversification and its leadership position in a number of end markets as evidenced by our very strong first quarter results," Cummins CEO Tom Linebarger said in a prepared statement. “Revenues in North America grew 40 percent in the first quarter, offsetting near-term softness in some emerging markets."

Cummins also affirmed its 2012 revenue forecast of 10-percent growth for the year.

The engine maker reported quarterly financial results before markets opened Tuesday.Cummins stock closed Monday at $115.83 per share.

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  1. You are correct that Obamacare requires health insurance policies to include richer benefits and protects patients who get sick. That's what I was getting at when I wrote above, "That’s because Obamacare required insurers to take all customers, regardless of their health status, and also established a floor on how skimpy the benefits paid for by health plans could be." I think it's vital to know exactly how much the essential health benefits are costing over previous policies. Unless we know the cost of the law, we can't do a cost-benefit analysis. Taxes were raised in order to offset a 31% rise in health insurance premiums, an increase that paid for richer benefits. Are those richer benefits worth that much or not? That's the question we need to answer. This study at least gets us started on doing so.

  2. *5 employees per floor. Either way its ridiculous.

  3. Jim, thanks for always ready my stuff and providing thoughtful comments. I am sure that someone more familiar with research design and methods could take issue with Kowalski's study. I thought it was of considerable value, however, because so far we have been crediting Obamacare for all the gains in coverage and all price increases, neither of which is entirely fair. This is at least a rigorous attempt to sort things out. Maybe a quixotic attempt, but it's one of the first ones I've seen try to do it in a sophisticated way.

  4. In addition to rewriting history, the paper (or at least your summary of it) ignores that Obamacare policies now must provide "essential health benefits". Maybe Mr Wall has always been insured in a group plan but even group plans had holes you could drive a truck through, like the Colts defensive line last night. Individual plans were even worse. So, when you come up with a study that factors that in, let me know, otherwise the numbers are garbage.

  5. You guys are absolutely right: Cummins should build a massive 80-story high rise, and give each employee 5 floors. Or, I suppose they could always rent out the top floors if they wanted, since downtown office space is bursting at the seams (http://www.ibj.com/article?articleId=49481).

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