Cummins on pace for another record year in 2008, CEO tells shareholders

Cummins enjoyed its most profitable year ever in 2007 when it reported net earnings of $739 million on $13.05 billion in sales.

The Trucker News Services

5/14/2008

COLUMBUS, Ind. — Cummins Inc. is on pace to report a fifth consecutive year of record sales and profits in 2008, and is poised for significant further growth over the next several years, Chairman and Chief Executive Officer Tim Solso told shareholders today at the company’s annual meeting.

Speaking to shareholders from the Columbus Engine Plant, Solso recapped Cummins’ 2007 performance and then outlined the company’s growth plans.

Cummins enjoyed its most profitable year ever in 2007 when it reported net earnings of $739 million on $13.05 billion in sales. The company’s total shareholder return of 118 percent in 2007 placed it 10th among the Fortune 500 companies, and its five-year average annual return of 58 percent was ninth best, according to a company news release.

“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,” Solso said. “We have gained share in key markets in the U.S. in the past year, and our international presence continues to strengthen.

Solso discussed the company’s growth targets for 2008: 12 percent sales growth and an earnings before interest and taxes goal of 10 percent of sales. The company also is targeting a 20 percent return on equity and a 25 percent return on average net assets.

Solso spoke of three broad global trends – increasingly strict emissions standards, the globalization of the world economy and rising demand for energy around the world – that will benefit Cummins over the next several years.

Solso also outlined several key drivers for the company’s expected future growth, including Cummins’ deep technological capability; a strong global network; and new products such as light-duty engines in the U.S. and China by 2010 and engines that meet the next wave of on- and off-highway emissions standards in the U.S. and Europe.

“I’m proud of our efforts over the past several years to grow the company and improve our financial structure, which have produced good returns for our shareholders,” Solso said. “That work has positioned us extremely well, and I am more excited about the future of the company than at any time during my 37 years with Cummins.”