Cummins Inc. (CMI, Financial) filed Quarterly Report for the period ended 2010-09-26.
Cummins Inc. has a market cap of $17.53 billion; its shares were traded at around $89.01 with a P/E ratio of 22.4 and P/S ratio of 1.6. The dividend yield of Cummins Inc. stocks is 1.2%. Cummins Inc. had an annual average earning growth of 30.9% over the past 10 years.CMI is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Robert Olstein of Olstein Financial Alert Fund, Kenneth Fisher of Fisher Asset Management, LLC, RS Investment Management, Richard Aster Jr of Meridian Fund, Paul Tudor Jones of The Tudor Group, John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC, PRIMECAP Management, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Net income attributable to Cummins was $678 million, or $3.43 per diluted share, on sales of $9.1 billion for the nine month interim reporting period ended September 26, 2010, versus the comparable prior year period with net income attributable to Cummins of $158 million, or $0.80 per diluted share, on sales of $7.4 billion. We recorded restructuring and other charges of $95 million ($63 million after tax, or $0.32 per diluted share) in the first nine months of 2009. The increase in income was driven by higher volumes in emerging markets, price improvements, decreased warranty expenses, increased equity income and restructuring charges incurred in 2009 that were not repeated in 2010. These were partially offset by higher income tax expense, selling, general and administrative expenses and research, development and engineering expenses.
In September 2010, we recorded a pre-tax recovery of $32 million ($21 million after tax, or $0.11 per diluted share) related to the overpayment of revenue based taxes on imported products in Brazil from 2004-2008. The tax recovery was recorded in cost of sales in our non segment business results as it was not considered by management in its evaluation of operating results for the quarter.
We generated $619 million of operating cash flows for the nine months ended September 26, 2010, compared to $730 million for the nine months ended September 27, 2009. Refer to the section titled Operating Activities later in the MD&A for a discussion of items impacting cash flows. In December 2007, Cummins Board of Directors authorized the acquisition of up to $500 million of Cummins common stock. In February 2009, we temporarily suspended our stock repurchase program to conserve cash through the U.S. recession. We resumed stock repurchases from our Board authorization in the fourth quarter of 2009 and we have repurchased $241 million for the first nine months of 2010. In July 2010, Cummins Board of Directors authorized a dividend increase of 50 percent to $0.2625 effective in the third quarter. Our debt to capital ratio (total capital defined as debt plus equity) at September 26, 2010, was 16.0 percent, compared to 14.9 percent at December 31, 2009. We currently have a Baa2 credit rating with a stable outlook from Moodys Investors Services and were recently upgraded to BBB+ with a stable outlook from Standard and Poors in September. In addition to the $1.245 billion in cash and marketable securities on hand, we have sufficient access to our revolver and accounts receivable program to meet currently anticipated growth and funding needs.
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Cummins Inc. has a market cap of $17.53 billion; its shares were traded at around $89.01 with a P/E ratio of 22.4 and P/S ratio of 1.6. The dividend yield of Cummins Inc. stocks is 1.2%. Cummins Inc. had an annual average earning growth of 30.9% over the past 10 years.CMI is in the portfolios of Ken Heebner of CAPITAL GROWTH MANAGEMENT LP, HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Robert Olstein of Olstein Financial Alert Fund, Kenneth Fisher of Fisher Asset Management, LLC, RS Investment Management, Richard Aster Jr of Meridian Fund, Paul Tudor Jones of The Tudor Group, John Buckingham of Al Frank Asset Management, Inc., Jim Simons of Renaissance Technologies LLC, PRIMECAP Management, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC.
Highlight of Business Operations:
Net income attributable to Cummins was $283 million, or $1.44 per diluted share, on sales of $3.4 billion for the three month interim reporting period ended September 26, 2010, versus the comparable prior year period with net income attributable to Cummins of $95 million, or $0.48 per diluted share, on sales of $2.5 billion. We recorded restructuring and other charges of $22 million ($15 million after tax, or $0.08 per diluted share) in the third quarter of 2009. The increase in income was driven by higher volumes in emerging markets, price improvements, decreased warranty expenses, increased sales in developed countries, increased equity income and restructuring charges incurred in 2009 that were not repeated in 2010. These were partially offset by higher income tax expense, selling, general and administrative expenses and research, development and engineering expenses.Net income attributable to Cummins was $678 million, or $3.43 per diluted share, on sales of $9.1 billion for the nine month interim reporting period ended September 26, 2010, versus the comparable prior year period with net income attributable to Cummins of $158 million, or $0.80 per diluted share, on sales of $7.4 billion. We recorded restructuring and other charges of $95 million ($63 million after tax, or $0.32 per diluted share) in the first nine months of 2009. The increase in income was driven by higher volumes in emerging markets, price improvements, decreased warranty expenses, increased equity income and restructuring charges incurred in 2009 that were not repeated in 2010. These were partially offset by higher income tax expense, selling, general and administrative expenses and research, development and engineering expenses.
In September 2010, we recorded a pre-tax recovery of $32 million ($21 million after tax, or $0.11 per diluted share) related to the overpayment of revenue based taxes on imported products in Brazil from 2004-2008. The tax recovery was recorded in cost of sales in our non segment business results as it was not considered by management in its evaluation of operating results for the quarter.
We generated $619 million of operating cash flows for the nine months ended September 26, 2010, compared to $730 million for the nine months ended September 27, 2009. Refer to the section titled Operating Activities later in the MD&A for a discussion of items impacting cash flows. In December 2007, Cummins Board of Directors authorized the acquisition of up to $500 million of Cummins common stock. In February 2009, we temporarily suspended our stock repurchase program to conserve cash through the U.S. recession. We resumed stock repurchases from our Board authorization in the fourth quarter of 2009 and we have repurchased $241 million for the first nine months of 2010. In July 2010, Cummins Board of Directors authorized a dividend increase of 50 percent to $0.2625 effective in the third quarter. Our debt to capital ratio (total capital defined as debt plus equity) at September 26, 2010, was 16.0 percent, compared to 14.9 percent at December 31, 2009. We currently have a Baa2 credit rating with a stable outlook from Moodys Investors Services and were recently upgraded to BBB+ with a stable outlook from Standard and Poors in September. In addition to the $1.245 billion in cash and marketable securities on hand, we have sufficient access to our revolver and accounts receivable program to meet currently anticipated growth and funding needs.
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