Cummins Inc. (CMI) raised its quarterly dividend payment by a whopping 52% to 40 cents per share from 26.25 cents per share, driven by its strong first quarter results made possible by its great success in international markets.
The new dividend is payable on September 1, 2011 to shareholders of record as of August 22, 2011.
Cummins last raised its dividend in July of last year by 50% from $0.175 per share. The company did not approve an increase in dividend in 2009.
In July 2008, its Board of Directors approved a 40% increase in dividend from $0.125 per share. Total dividends paid to common shareholders by the company were $122 million, $141 million and $172 million in 2008, 2009 and 2010, respectively.
The Zacks #1 Rank (Strong Buy) company reported an impressive rise in profit to $343 million or $1.75 per share in the first quarter of 2011 from $149 million or 75 cents per share in the same quarter of prior year. The profit surpassed the Zacks Consensus Estimate of $1.44.
Earnings before Interest and Taxes (EBIT) of $532 million (13.8% of sales) went up from $266 million (10.7% of sales) in the first quarter of 2010. EBIT excluded a one-time gain of $12 million during the quarter. The company now expects EBIT to reflect 14% of $17 billion in sales for 2011.
Sales for the company surged 56% to $3.86 billion from $2.48 billion in the same quarter last year, mainly driven by the truck market recovery in North America, productivity enhancements and increased activities in the international markets. It exceeded the Zacks Consensus Estimate of $3.60 billion.
Cummins is a leading manufacturer of diesel and natural gas engines, electric power generation systems, and engine-related components, fuel systems, controls and air handling systems. Headquartered in Columbus, Indiana, the company serves more than 190 countries through its network of 500 company-owned as well as independent distributor facilities and more than 5,200 dealer locations.
The company’s customer base comprises leading manufacturers, including Chrysler LLC, Daimler AG, Volvo AB, PACCAR Inc. (PCAR), Navistar International Corporation (NAV), CNH Global N.V., Komatsu, Scania AB, Ford Motor Company (F) and Volkswagen.
Its major competitors include Caterpillar Inc. (CAT). The company will report its second quarter results on July 26, 2011.
