Engines drive profit increase

Engine maker Cummins has reported its fifth consecutive year of record sales and profits, despite significant global economic challenges that negatively affected its fourth quarter performance.

In 2008, its sales increased 10 per cent to $14.34bn (£9.9bn), from $13.05bn in 2007. Net income rose eight per cent to $801m, or $4.08 per share, compared to $739m or $3.70 per share the previous year. 

But the company admitted that market conditions around the world began to deteriorate sharply in the fourth quarter due to the global recession.

As such, its fourth quarter sales fell six per cent to $3.29bn compared to $3.52bn during the same period in 2007. Net income dropped to $89m or $0.45 a share, from $198m, or $1.00 a share a year ago. 

Sales declines in the company’s Engine and Components divisions, driven by sharp drops in demand in the global truck and construction markets, more than offset gains in its Power Generation and Distribution wings.