Diesel engine maker Cummins Inc. (NYSE: CMI) reported a higher first-quarter profit on Friday, citing stronger sales of industrial power equipment. The firm also boosted its full year earnings forecast, sending shares up more than 11 percent.
The Columbus, Ind.-based manufacturer said Friday it earned $143 million, or $1.42 per share for the quarter ending April 1. The figure represents a 6 percent increase over its earnings the same period a year ago of $135 million, or $1.35 a share. Sales rose 5.2 percent to $2.82 billion
The results were stronger than expected, sending shares up $10.15, or 11.80 percent to close at $96.14 on the New York Stock Exchange.. Analysts polled by Thompson Financial forecasted earnings of 86 cents per share, on average.
Sales of heavy and medium duty truck engines slowed as a result of tougher emission laws passed during the quarter in the United States. Sales in that segment fell 3 percent to $1.76 billion following large pre-buying of engines before the emissions change
Cummins was able to shrug off the declines with strength from its power generation unit. Industrial power generation and distribution equipment rose 26 percent to $675 million. The firm sold 27 percent more commercial generators and 43 percent more alternators than the same period last year.
Looking forward, the company raised its full year profit forecast to $6 to $6.50 a share, up from a previous forecast range of $5.50 to $5.75 a share. Analysts' average forecast stands at $5.39 per share, according to Thomson Financial.