Indiana-based manufacturer Cummins Inc. on Tuesday reported big jumps in quarterly profit and revenue that exceeded Wall Street expectations.
The Columbus-based company turned a third-quarter profit of $453 million, or $2.71 per share, compared to $289 million, or $1.72 per share, in the same quarter of 2016.
The per-share earnings figure far exceeded the average prediction of $2.47 per share by 10 analysts surveyed by Zacks Investment Research
Third quarter revenue surged 26 percent, to $5.3 billion, up from $4.2 billion in the year-ago period. Analysts had expected revenue of $4.8 billion.
Revenue jumped significantly in all markets and segments. Sales were up 26 percent in the engine segment, to $2.3 billion; rose 17 percent in the distribution segment, to $1.8 billion; increased 34 percent in the components segment, to $1.5 billion; and expanded 23 percent in the power systems segment, to $1.1 billion.
North America sales grew 25 percent because of higher demand in truck, oil and gas, and construction markets. International sales grew 28 percent, mostly due to strong truck and construction demand in China, sales of new products in India, and increased demand from global mining customers, Cummins said.
“Cummins experienced positive momentum in demand in a number of important markets, resulting in strong sales growth in the third quarter,” Chairman and CEO Tom Linebarger said in written remarks. “Earnings improved over the year-ago period due to stronger volumes and operational improvements that more than offset increased quality costs.”
Cummins raised its full-year 2017 sales forecast. It now expects revenue to grow in the range of 14 percent to 15 percent, up from the range of 9 percent to 11 percent.
The engine maker said earnings before interest and taxes are expected to remain in the range of 11.2 percent to 12.2 percent of sales, unchanged from prior guidance.
Cummins shares dropped 3.6 percent Tuesday morning, to $173.90 each. Entering the day, they were up 32 percent this year.