Cummins Inc. reported a slight sales decline in the second quarter as the strength of the North American market was more than offset by weakness in overseas markets.
However, Cummins stock surged Tuesday because of the company’s continued solid profitability, two local investment analysts said.
Second-quarter sales, at $4.45 billion, fell about 4.1 percent from the second quarter of 2011.
Although net income fell 7.1 percent to $469 million, the company said that excluding the impact of divestitures, earnings per share increased 4 cents to $2.45 from the second quarter last year.
“The company continued to deliver strong profits despite the weakening global economic conditions,” said Tom Linebarger, the company’s chairman and chief executive officer.
Linebarger said second-quarter gross margins — or the difference between sales and the cost of those sales — reached record levels.
Sales in the Engine Segment fell 2 percent to $2.8 billion. Lower demand in the Chinese construction, Brazilian truck and North American oil and gas markets offset more sales of North American trucks and construction equipment.
The segment’s earnings before interest and taxes fell $1 million, to $376 million, compared to the second quarter of 2011.
Sales for the Components group was flat at $1 billion. The company reported better results in North America and Brazil, but weaker demand in Europe and China.
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