Cummins’ executives say significant uncertainty exists about future revenues, especially in a number of foreign markets, but the engine maker’s fourth-quarter sales results at least demonstrated some reason for optimism.
Cummins said its fourth-quarter financial results also were boosted by federal research tax credits that might not be renewed and some favorable state income tax situations.
For the year ending Dec. 31, Cummins said its effective tax rate was 25.1 percent. But the company expects that tax bite to increase this year.
“We expect our 2014 effective tax rate to be 28.5 percent, excluding any discrete items that may arise,” Cummins said. Certain tax changes in the United States and United Kingdom are among reasons for the increase, the company said.
However, if Congress decides to renew research tax credits that expired at the end of last year, Cummins’ overall effective tax rate would be 27 percent, the company said.