As the global economy sputtered in the fall of 2008, it took worldwide truck-engine supplier Cummins (CMI) off the road with it.
But in the last few quarters, Cummins has been humming along again, thanks especially to strong growth in international markets such as China, India and Brazil.
Now the North American trucking business is starting to show signs of coming around as well.
There's a lot of pent-up demand for trucks in the U.S.," said Standard & Poor's equity analyst Jim Corridore. "During the downturn people did not add to fleets. They let them age.
"The volume of trucks the last several years has fallen so far behind historical numbers it would be difficult not to have a rebound this year and next," he added.
Management noted that demand for its heavy-duty, on-highway products in North America was five times higher in the first three months of 2011 than in the same period in 2010. Medium-duty truck and bus shipments in North America were six times higher over the same time.
Q1 By The Numbers
On April 26, the company reported a blowout first quarter with earnings up 133% vs. last year to $1.75 a share, beating Wall Street's consensus by 31 cents.
Afterward, management raised its 2011 guidance, calling for sales to rise $1 billion more than earlier guidance of $16 billion. In 2010, Cummins took in $13.2 billion.
Earnings before interest and taxes amounted to 13.8% of sales, "the best quarterly performance ever at Cummins," Chief Executive Tim Solso said.
The firm expects 2011 EBIT margin of 14%, up from prior guidance of 13.5%.
Analysts surveyed by Thomson Reuters see earnings growing 54% this year over last, to $7.95 a share, and going up 20% in 2012. Earnings jumped 108% in 2010 over a weak 2009.
Solso cited "significant growth" in demand for its products and services in nearly every geographic market.
Indiana-based Cummins makes engines for trucks, buses and construction equipment. It was one of the first firms to manufacture diesel engines.
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