Cummins sales and profits hit a record high for five consecutive years
Cummins announced its 2008 performance in recent days. Although the fourth quarter of 2008 suffered from a decline in external environmental impact, sales and profits for the full year continued to hit record highs for five consecutive years. Sales in 2009 are expected to drop 20% from 2008 but will remain profitable.
In 2008, Cummins’ sales amounted to US$14.34 billion, an increase of 10% from the US$1.305 billion in 2007; net profit climbed to US$801 million, an increase of 8 percentage points from US$737 million in 2007; EBITDA was 1.29 billion. The dollar, which is equivalent to 9% of sales, fell slightly compared with the 9.4% EBIT in 2007.
In 2008, the company’s sales in the overseas markets outside the United States increased further, from 54% in 2007 to 59% in 2008, and Asia accounted for more than one-fifth of global operations. Among them, Cummins China's total sales of imported products and joint ventures reached US$2.3 billion, an increase of 33% over 2007.
Due to the global economic depression, Cummins’s sales and profit margins declined sharply in the fourth quarter of 2008. Sales, net profit, and EBIT decreased by 6%, 55%, and 60% respectively from the same period in 2007. Tim Solso, Cummins Chairman and Chief Executive Officer, pointed out that the sudden and rapid global economic recession in the fourth quarter caused a significant negative impact on Cummins’ operating performance in 2008, but Cummins began to make corresponding adjustments in early December to reduce The cost has tightened investment. In early 2009, the company took further measures to reduce operating expenses.
In view of the latest market forecast and the overall global economic situation in 2009 is still not optimistic, Cummins lowered its 2009 sales and EBIT forecasts. Cummins’ sales this year are expected to fall by around 20% from 2008, and the EBIT ratio will be 6.5% (excluding the costs of layoffs and restructuring in the first quarter of 2009), and the company will remain profitable.
According to the forecast, sales of the four major Cummins Divisions will show a downward trend in 2009, with the largest decline among the parts and engine divisions, but all divisions will remain profitable.
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