Diesel engine maker Cummins Inc. said it would make a profit of $3 million after taxes on revenues of $1.41 billion for the third quarter of 2001. Cummins added that those earnings are down from the same quarter last year, when the company earned $25 million profit after taxes on sales of $1.57 billion.
Tim Solso, Cummins’ chairman & CEO, said profits declined primarily because of drooping engine sales. "Our engine business continues to be particularly hard hit with revenues down 20% from the third quarter of 2000," he said. "However, we continue to realize the benefits from our aggressive cost reduction efforts across all of our businesses, including the benefits of our restructuring actions and Six Sigma programs."
Solso said that total sales for Cummins’ engine business in the third quarter were $767 million, compared to $962 million a year ago – a drop of 20%. Earnings before interest and taxes were a loss of $18 million versus a profit of $6 million in the third quarter last year, due primarily to volume decreases and the resulting under-absorption of overhead costs. Worldwide heavy-duty truck sales of $222 million were down 27% compared to the third quarter of 2000, with a 45% decrease in unit shipments to the North American heavy-duty truck market, he said.
Cummins’ sales to light-duty automotive and recreational vehicle markets were $165 million, down 22% from the year-ago level, due to a decrease in shipments to DaimlerChrysler of 29% from the third quarter of last year, Solso added.