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Focus: Cummins Announces 2016 Overall Performance

February 13, 2017, the author learned from Cummins China, Cummins (NYSE: CMI) recently announced the fourth quarter of 2016 and full year performance. Cummins' 2016 annual sales revenue of 17.5 billion US dollars, down 8%. The company's net profit for the year was $ 1.39 billion, unchanged from 2015.
2016 fourth quarter results
As a result of the decline in North American truck market production, weak demand for global industrial engines and power products, Cummins's sales in the fourth quarter of 2016 fell 6% year-on-year to $ 4.5 billion. Of which 2% of the decline from the dollar exchange rate on the sales revenue calculation of the adverse effects. North American market fell significantly, sales fell 13%. And because of the contribution of China's performance, the international market revenue grew 6%.
In the fourth quarter of 2016, Cummins achieved net profit of $ 378 million (diluted earnings per share of $ 2.25), compared with $ 161 million (diluted earnings per share of $ 0.92) for the same period in 2015. In the fourth quarter of 2016, Cummins EBIT was $ 526 million and EBIT was 11.7%, compared to $ 23 billion in the same period last year, with a yield of 4.8%
"Despite the weakness in demand in several of the largest markets, Cummins has created good results in the fourth quarter, benefiting from North American market-leading market share and our strong initiatives in cost control, our performance is better than expected "Said Tom Linebarger, Cummins' chairman and chief executive officer." Some of the key initiatives implemented by the company in 2016 have helped us make significant progress, including the reorganization of implementing agencies, the completion of the North American distributor And continued investment in new products, all of which have laid a solid foundation for Cummins' earnings growth after future market conditions have improved.
2016 annual results
Cummins sold $ 17.5 billion in sales in 2016 (excluding non-holding joint venture sales), down 8% year-on-year. North American market sales fell 12%, the international market revenue fell 2%. If the exchange rate factor is deducted, the international market is expected to grow by 2%, mainly due to the growth of the Chinese and Indian markets, which partially offset the weakness in the Latin American, Middle East and African markets. In 2016, Cummins in China, including joint ventures total sales income of 4 billion US dollars, a record high. This is mainly due to the growth of the truck and construction machinery market, as well as the rise of spare parts business such as emissions handling systems.
Cummins net profit for the year was $ 1.39 billion (diluted earnings per share of $ 8.23), and net profit for 2015 was $ 1.4 billion (diluted earnings per share of $ 7.84). Excluding impairment and restructuring charges, net income for 2015 was $ 1.59 billion (diluted earnings per share of $ 8.93).
2016 Cummins interest before tax earnings of 20 billion US dollars, pre-tax rate of return of 11.4%. Earnings before 2012 EBIT $ 2.1 billion, with a yield of 12.5%.

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