|Standard & Poor's Raises Outlook for Cummins to Positive|
COLUMBUS, Ind.--(BUSINESS WIRE)--Aug. 17, 2007--Cummins Inc. (NYSE: CMI) today announced that Standard & Poor's (S&P), a leading ratings agency, has raised its outlook for Cummins to positive, from neutral. The agency affirmed its investment grade debt rating of BBB-, leaving open the possibility for an upgrade in the "near to intermediate" future.
In raising its outlook for the Company, S&P cited Cummins' "prospects for continued good operating performance" and its "improved financial profile resulting from a steady reduction in financial leverage over the last several years."
S&P also noted that Cummins has continued to perform well in 2007 despite the expected downturn in the North American heavy-duty truck engine market, and acknowledged the Company's debt reduction of $700 million and pouring more than $400 million into its pension funds since the beginning of 2005.
While S&P's report acknowledged challenges for Cummins, including the inherent cyclicality in many of its markets and strong competition, the agency indicated that the Company's improved financial profile and its strong position in most markets has positioned it well to weather a downturn.
Cummins has reported record financial results each of the past three years, and is on pace for another record year in 2007. The Company raised its annual earnings guidance to $7.15 - $7.65 a share when it reported second quarter earnings in late July.
Cummins experienced strong growth in virtually every product segment and geographic region during the first half of 2007. That growth more than made up for the drop in North American heavy-duty truck engines sales as a result of stringent new EPA emissions regulations that went into effect Jan. 1.
In addition to strengthening its balance sheet, Cummins remains committed to returning value to its shareholders and investing in future growth opportunities. The Company split its common stock 2-for-1 in early April and increased its dividend by 39 percent in July - its second dividend increase in a year. Accounting for the stock split, Cummins stock has risen 85 percent in 2007, and hit an all-time closing high of $124.75 on Aug. 2.
Cummins Inc., a global power leader, is a corporation of complementary business units that design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. Headquartered in Columbus, Indiana, (USA) Cummins serves customers in more than 160 countries through its network of 550 Company-owned and independent distributor facilities and more than 5,000 dealer locations. Cummins reported net income of $715 million on sales of $11.4 billion in 2006. Press releases can be found on the Web at www.cummins.com.
Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the company's expectations, hopes, beliefs and intentions on strategies regarding the future. It is important to note that the company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Cummins Securities and Exchange Commission filings.
CONTACT: Cummins Inc.
SOURCE: Cummins Inc.