Coming off a prolonged downturn in U.S. manufacturing, engine maker Cummins multiplied its profits fourteenfold since 2003, to a record $715 million in 2006. Despite its efforts to go global—Cummins booked half of its sales overseas last year—its uptrend is likely to end in 2007. The company is growing in India and China, but counts heavily on American-nameplate truck clients, building heavy-duty engines for DaimlerChrysler’s Ram pickups and Navistar International’s long-haul rigs. And U.S. truck sales are hitting the brakes. As a result, CEO Theodore “Tim” Solso warns that profits probably will drop at least 19% this year. Already, the outlook is undermining Cummins’ stock. Its shares have tripled since Jan. 1, 2004, to an all-time high of $145.69 in mid-February, but have since lost 6%. Longer term, though, Solso foresees higher numbers as the U.S. truck market rebounds and developing nations continue their hurried expansions. Cummins recently began its fifth engine-making joint venture in China, and bought out its partner in an Indian joint venture.
|Sales Growth Rate**|
|12-Month Net Income||
|Total Return||Past 12 Months|
|Past 36 Months
|Industry||Construction & Farm Machinery & Heavy Trucks|