Revenue during the quarter grew 6.94 percent to $4,589 million from $4,291 million in the previous year period. Gross margin for the quarter contracted 3 basis points over the previous year period to 24.58 percent. Total expenses were 88.10 percent of quarterly revenues, down from 89.05 percent for the same period last year. This has led to an improvement of 94 basis points in operating margin to 11.90 percent.

Operating income for the quarter was $546 million, compared with $470 million in the previous year period.

"Cummins delivered solid financial results, successfully launched new products and returned $222 million in cash to shareholders in the form of dividends and share repurchases in the first quarter," said chairman and chief executive officer Tom Linebarger. "We launched our fully updated range of engines for North American truck and bus markets offering improved performance and better fuel economy for our customers. As recently announced, we also advanced our strategy to be the leading global powertrain supplier through our agreement with Eaton to form the Eaton Cummins Automated Transmission Technologies joint venture. This new venture will design, develop and produce the next generation of Automated Transmissions which will be fully integrated with our engine development to deliver up to an additional 7 percent improvement in fuel economy. The joint venture will benefit from the continuing shift away from fully manual transmissions in commercial vehicles, launch new products that will gain market share, leverage Cummins’ strong presence in international markets for growth and generate aftermarket sales."

Cummins expects revenue to grow in the range of 4 percent to 7 percent for the financial year 2017.

The company has spent $27 million cash to meet investing activities during the quarter as against cash outgo of $388 million in the last year period.

The company has spent $164 million cash to carry out financing activities during the quarter as against cash outgo of $636 million in the last year period.

Cash and cash equivalents stood at $1,322 million as on Apr. 02, 2017, up 44.48 percent or $407 million from $915 million on Apr. 03, 2016.

Working capital decreases marginally
Cummins has witnessed a decline in the working capital over the last year. It stood at $3,497 million as at Apr. 02, 2017, down 1.52 percent or $54 million from $3,551 million on Apr. 03, 2016. Current ratio was at 1.75 as on Apr. 02, 2017, down from 1.91 on Apr. 03, 2016.

Cash conversion cycle (CCC) has decreased to 48 days for the quarter from 91 days for the last year period. Days sales outstanding went down to 61 days for the quarter compared with 63 days for the same period last year.

Days inventory outstanding has decreased to 38 days for the quarter compared with 79 days for the previous year period. At the same time, days payable outstanding was almost stable at 51 days for the quarter, when compared with the previous year period.