Cummins Inc. (CMI) has reported 134.78 percent jump in profit for the quarter ended Dec. 31, 2016. The company has earned $378 million, or $2.25 a share in the quarter, compared with $161 million, or $0.92 a share for the same period last year. Revenue during the quarter dropped 5.52 percent to $4,503 million from $4,766 million in the previous year period. Gross margin for the quarter contracted 56 basis points over the previous year period to 24.87 percent. Total expenses were 88.74 percent of quarterly revenues, down from 95.20 percent for the same period last year. This has led to an improvement of 645 basis points in operating margin to 11.26 percent.
Operating income for the quarter was $507 million, compared with $229 million in the previous year period.
"Despite weak conditions in a number of our largest markets, Cummins delivered fourth quarter results that were a little better than expected due to our strong market share in on-highway markets in North America and the benefits of our cost reduction work," said Tom Linebarger chairman and chief executive officer. "We made significant progress in a number of our key initiatives in 2016, including executing our restructuring actions, completing the acquisition of our distributors in North America and continuing to invest in new products, all of which help position the Company for profitable growth when markets improve. We also returned 75 percent of the Company Operating Cash Flow to shareholders, consistent with our plan for the year."
Cummins projects revenue to grow at 5 percent for the financial year 2017.
Operating cash flow declinesCummins Inc. has generated cash of $1,935 million from operating activities during the year, down 6.02 percent or $124 million, when compared with the last year. Cash flow from investing activities was almost stable for the quarter at $917 million, when compared with the previous year period.
The company has spent $1,409 million cash to carry out financing activities during the year as against cash outgo of $1,644 million in the last year period.
Cash and cash equivalents stood at $1,120 million as on Dec. 31, 2016, down 34.54 percent or $591 million from $1,711 million on Dec. 31, 2015.
Working capital declines
Cummins Inc. has witnessed a decline in the working capital over the last year. It stood at $3,382 million as at Dec. 31, 2016, down 18.39 percent or $762 million from $4,144 million on Dec. 31, 2015. Current ratio was at 1.78 as on Dec. 31, 2016, down from 2.09 on Dec. 31, 2015.
Cash conversion cycle (CCC) was almost stable at 41 days for the quarter, when compared with the last year period. Days sales outstanding went up to 30 days for the quarter compared with 28 days for the same period last year.
Days inventory outstanding was almost stable at 36 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went up to 25 days for the quarter from 23 for the same period last year.
Debt moves up
Cummins Inc. has witnessed an increase in total debt over the last one year. It stood at $1,821 million as on Dec. 31, 2016, up 13.81 percent or $221 million from $1,600 million on Dec. 31, 2015. Total debt was 12.13 percent of total assets as on Dec. 31, 2016, compared with 10.57 percent on Dec. 31, 2015. Debt to equity ratio was at 0.25 as on Dec. 31, 2016, up from 0.21 as on Dec. 31, 2015. Interest coverage ratio improved to 28.17 for the quarter from 12.72 for the same period last year. Disclaimer: Please note that this is an auto-generated article. IRIS does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. IRIS especially states that it has no financial liability whatsoever to any user on account of the use of information provided on its website. For queries contact: editor@irisindia.net
