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Cummins Inc.’s leading executives said Tuesday that new products and tougher emissions standards across the globe would allow the engine maker to reach annual sales of between $25 billion and $31 billion by 2018. Last year, the company reported sales of $17.3 billion.
Executives, including Chief Executive Officer Tom Linebarger, told about 100 Wall Street analysts and shareholders that the company expects its revenues to rise at two to three times the growth rate of global gross domestic product over the next five years. Whether sales would reach $31 billion or $25 billion will depend on global economic conditions, the company said in a news release.
The company did not give details about how that growth might affect employment, but the company’s growth in the last decade also came with significant numbers of new jobs. In the last decade, revenues have roughly tripled, while employment almost doubled, from 23,700 in 2002 to 46,000 last year.
“With the (projected) growth ... we hope to add jobs,” said
Cummins spokesman Jon Mills in an email.
Linebarger said, “We are confident in our plans to grow faster than the end markets we serve. Our leadership in technology, strong partnerships and unmatched global presence allows us to deliver the best products and services to help our customers win in the markets where they operate all over the world.”
Scott DeDomenic, senior vice president with Hilliard Lyons in Columbus, said Cummins’ sales will be affected significantly when China and India tighten their emissions standards.
DeDomenic also said that Cummins is projecting that its revenues will continue to be generated by a more diverse product mix, with the importance of medium-duty engines, for example, accounting for a greater share of overall sales.
Cummins executives have said for years that the company will be a $30 billion company, DeDomenic said.
Cummins’ stock fell $1.89, or 1.41 percent, Tuesday to close at $131.96. The Dow Jones industrial average rose 34.95 points, or 0.23 percent, to 15,529.73 and the Nasdaq composite index climbed 27.85, or 0.75 percent, to 3,745.70.
Even if Cummins’ growth reaches the high end of its projection, it still would lag behind the torrid growth the company achieved over the past decade. Between 2002 and 2012, sales rose an average of nearly 20 percent annually. If sales reach $25 billion by 2018, the company’s annual growth rate would be about 8 percent over the next five years. If sales hit $31 billion, the average annual growth would be about 12 percent.
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