Archrival engine manufacturers Caterpillar and Cummins shared one thing in common this quarter: they both broke sales records, leading to two-fold increases in profits.
Caterpillar’s third-quarter profits topped $498 million on a 38% jump in revenues to $7.65 billion compared to the same period last year. Truck engine sales totaled $2.48 billion, a 33% increase over the same period last year. “North American engine [unit] sales increased 36% [and] was heavily impacted by a 57% increase in sales of on-highway truck engines, as improved industry health drove a continuation of fleet expansion and replacement,” the OEM stated.
“While global economic growth is expected to slow slightly from the robust levels we’ve experienced this year, the key sectors we serve should continue to show solid growth next year,” said Caterpillar Chairman & CEO Jim Owens. Caterpillar is looking to surpass its own record profits in 2005 on 10% more revenues, he added.
Cummins Inc. reported record third-quarter sales, driven by North American heavy-duty truck engine orders and record revenues from its Power Generation subsidiary.
Revenues increased 34% to $2.19 billion compared to the same period last year, while profits before interest and taxes more than doubled to $146 million, compared to $61 million earned during the third quarter of 2003.
“Demand for our products continues to be extremely strong,” said Cummins Chairman & CEO Tim Solso. “Our sales were stronger than expected in most markets, led by the North American heavy duty truck engine market, where our sales more than doubled from the same time last year and where we continue to gain market share.”
Engine unit sales rose 53% from third quarter 2003 to $1.44 billion, led by sharply higher sales in North America. Sales volumes in the North American heavy-duty truck market rose 119% compared to the same period in 2003, while medium-duty truck engine shipments increased 74%.
Shipments of Dodge Ram engines rose 11%, building on record performance in that market this year. Overall, engine shipments rose 30% to more than 106,000 units compared to the third quarter last year.