Cummins Streamlining Business Units
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowColumbus-based Cummins Inc. is reporting first quarter net income of $321 million, compared to $387 million during the same period a year earlier. The company also announced a re-organization of two business units.
Cummins has combined its Power Generation Segment and High Horsepower Engine Business, creating the Power Systems Segment. Chief Executive Officer Tom Linebarger says the move "combines two businesses that are already strongly interdependent and will allow us to streamline business and technical processes to accelerate innovation, grow market share and more efficiently manage our supply chain and manufacturing operations."
Moving forward, Cummins will present financial results for four operating segments: Engine, Distribution, Components and Power Systems.
Chief Operating Officer Rich Freeland says "our results for the first quarter reflect solid execution of our cost reduction plans in the face of very challenging market conditions. Benefits from restructuring actions, material cost reduction projects and lower warranty costs all helped to mitigate the impact of lower sales."
Cummins reports international revenues in Latin America and Asia took a big hit and adds that several other factors had an effect on its bottom line. Many major manufacturers, including Cummins, have cited the impact of global currency conditions, which it says caused a 3 percent dip in revenues this quarter. The company says power production in the North American heavy-duty truck market and weak global demand for off-highway and power generation equipment led to lower sales.
The company says revenues decreased 9 percent to $4.3 billion. It anticipates full-year revenues to be down 5 to 9 percent.