Cummins Inc.
(
CMI
) announced that it will launch diesel engines in compliance with
2014 fuel efficiency and greenhouse gases (
CHG
) regulations beginning in January 2013. The engines will deliver
up to 2% fuel economy improvement over the engines produced
nowadays and will be available for North American trucks. They
include ISB6.7 to ISX15 lineups.
In August 2011, Cummins intended to begin actions to comply with
the new fuel efficiency and GHG standards of 2014. The standard was
proposed by the U.S. Environmental Protection Agency (EPA) and the
U.S. Department of Transportation (DOT).
Cummins also plans to focus on strengthening its position in the
natural gas engine market. Accordingly, the company is investing in
the development of natural gas engines.
The company plans to introduce spark-ignited natural gas engines
through Cummins Westport, whch is a joint venture between Cummins
and
Westport Innovations
(
WPRT
). The joint venture will begin producing the engine, ISX12G, in
2013.
Further, Cummins intends to develop a new 15-liter engine,
ISX15G that is based on the existing ISX15 platform. It will be
capable of using compressed natural gas, liquified natural gas or
bio-methane fuel. The company will begin producing the engines in
early 2015.
Cummins posted earnings of $2.86 per share in the fourth quarter
of 2011 compared with $1.84 per share in the same quarter of 2010.
Excluding special items, the company recorded adjusted earnings of
$2.56 per share, surpassing the Zacks Consensus Estimate of $2.24
per share.
Sales in the quarter grew 19% to $4.9 billion, driven by higher
demand in trucks, construction, power generation and oil and gas
markets in North America as well as strong growth in global mining
markets.
In the Engine segment, sales increased 23% to $3.1 billion in
the quarter. The increase in sales was driven by higher demand for
on-highway heavy-duty, mid-range and light duty engines in North
America and strong demand for oil and gas engines in North America,
apart from mining engines globally.
Based in Columbus, Indiana, Cummins is a leading worldwide
designer, manufacturer and distributor of diesel and natural gas
engines, electric power generation systems, and engine-related
components, fuel systems, controls and air handling systems. The
company has four operating segments such as Engine, Power
Generation, Components and Distribution.
Cummins is comfortably positioned to benefit from several
trends, such as the new emission standards, fuel economy
improvement and favorable trends for its Power Generation business.
New emission regulations in particular, create opportunities for
the company, such as the ability to raise prices, market share
gains and increased engine content.
Currently, the stock retains a Zacks #2 Rank (short-term Buy
rating). It competes with the companies like
Caterpillar Inc.
(
CAT
) and
Navistar International
Corporation
(
NAV
).
CATERPILLAR INC (
CAT
): Free Stock Analysis Report
CUMMINS INC (
CMI
): Free Stock Analysis Report
NAVISTAR INTL (
NAV
): Free Stock Analysis Report
WESTPORT INNOV (
WPRT
): Free Stock Analysis Report
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