Cummins Inc. is shining in an otherwise dismal economy as it's on pace to shatter its 2007 net-earnings record of $739 million, which if accomplished would mark the fifth-consecutive year of record growth.
The Columbus, Ind., maker of large diesel engines used in everything from pickup trucks to mining equipment said during the company's annual shareholders' meeting in May that it's headed for another strong year.
"Cummins remains on track for further profitable growth -- this year and beyond -- despite the economic uncertainty affecting some of our U.S. consumer-oriented markets," said Chairman and CEO Tom Solso in a May 13 statement. "We have gained share in key markets in the U.S. in the past year, and our international presence continues to strengthen."
Indeed, the company has laid out a plan for worldwide growth with 19 new plants and 42 capacity expansion projects in the works. Among the company's new projects are major expansions in India for both midrange and high-horsepower engines, power generation and turbochargers, and a fuel system plant in China.
Cummins also has introduced or is planning several new products such as light-duty engines in the United States and China by 2010, engines that meet more stringent global emissions standards and a common-rail fuel system.
In 2008 the company expects its financial performance will be bolstered by demand for its emissions technology, its expanding presence in emerging markets and surging demand for its power-generation products because of increasing power needs in developing countries.
At A Glance
Primary Industry: Motor Vehicle Parts
Number of Employees: 37,800
2007 In Review
Revenue: $13.05 billion
Profit Margin: 5.66%
Sales Turnover: 1.59
Inventory Turnover: 6.80
Revenue Growth: 14.84%
Return On Assets: 9.90%
Return On Equity: 26.37%
If Cummins' forecast for a strong 2008 holds true, it could be on track to meet its growth targets for the year, which include a 12% sales increase, an earnings before interest and taxes goal of 10% of sales, a 20% return on equity and a 25% return on average net assets.
Meanwhile, the company named Tom Linebarger its new president and COO effective Aug. 1. Linebarger, 45, currently serves as president of Cummins Power Generation and has been executive vice president at the company since 2005. He's replacing Joe Loughrey, who will serve as vice chairman until he retires in March 2009.
Linebarger helped rebuild the Power Generation business from an operating loss of $19 million in 2003 to an operating profit of $334 million in 2007.
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