Big sales increases in Cummins Inc.’s Distribution and Components business segments in 2014 helped fuel the company’s record year for revenue.
Here is a recap of the performance by each of the company’s four business units.
FULL YEAR: Sales jumped 38 percent compared with 2013, from almost $3.75 billion to nearly $5.2 billion. Acquisitions and stronger demand for parts and service in North America were factors in the success, the company said in a media release. Revenue from the service market increased from $640 million to more than $1 billion, and sales in the parts and filtration market jumped from almost $1.5 billion to more than $1.9 billion. Cummins has been buying its distributors and acquired three during 2014 — Cummins Bridgeway, Cummins Npower and Cummins Power South.
FOURTH QUARTER: The Distribution segment also experienced a fourth-quarter sales increase of nearly 58 percent compared with the same period during 2013.
FULL YEAR: Revenue increased almost 18 percent, from about $4.3 billion in 2013 to nearly $5.1 billion. Notably, sales in the emissions solutions market increased from almost $1.8 billion to more than $2.3 billion. The Components segment’s success resulted from higher demand in on-highway markets in North America, Europe and China, the company said.
FOURTH QUARTER: The segment’s fourth-quarter revenue reflected a 16 percent increase from the same period in 2013.
FULL YEAR: Cummins’ Engine business — which makes up more than half of the company’s total revenue — also reported increased sales, with a 9.5 percent rise for the year. The engine segment’s year-end sales of nearly $11 billion increased more than 9 percent from the previous year’s total of $10 billion. Notably, sales in the heavy-duty truck market increased from $2.7 billion to $3.1 billion year over year, and revenue in the medium-duty truck and bus market increased from almost $2.2 billion to more than $2.5 billion. Strong demand in on-highway markets in North America offset weakness in Brazil, China and Europe, Cummins said.
FOURTH QUARTER: The Engine business’s fourth-quarter sales improved from more than $2.5 billion in 2013 to more than $2.8 billion last year, nearly an 11 percent jump.
FULL YEAR: This segment was the only one to report a year-over-year decline in 12-month sales. Year-end revenue of nearly $2.9 billion reflected a drop of more than 4 percent from the prior year’s $3 billion. All four of the segment’s markets (power products, power systems, alternators and power solutions) experienced a drop in sales. The company said actions it has taken to lower costs should improve Power Generation earnings going forward. One of those actions was the closure of a plant in Germany.
FOURTH QUARTER: Fourth-quarter sales of $760 million by the Power Generation business were almost identical to its $759 million in revenue for the same quarter of 2013.