Cummins (CMI)

Cummins Inc. 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, headquartered in Columbus, Indiana, is serving more than 190 countries through its network of 500 company-owned as well as independent distributor facilities and more than 5200 dealer locations. Cummins sells its products to Original Equipment Manufacturers (OEMs), distributors and other customers worldwide. The company's customer base comprise of leading manufacturers in the markets, including Chrysler LLC, Daimler AG, Volvo AB, PACCAR Inc., International Truck and Engine Corporation (Navistar International Corporation), CNH Global N.V., Komatsu, Scania AB, Ford Motor Company and Volkswagen.

The Engine segment produces engines and parts for sale to customers in on-highway and various industrial markets. The engines are used in trucks of all sizes, buses and recreational vehicles, as well as various industrial applications including construction, mining, agriculture, marine, oil and gas, rail and military. The Power Generation segment is an integrated provider of power systems, which sells engines, generator sets and alternators and rents power equipment for both standby and prime power uses. The Components segment includes sales of filtration products, exhaust after treatment systems, turbochargers and fuel systems. The Distribution segment includes wholly-owned and partially-owned distributorships engaged in wholesaling engines, generator sets, and service parts, as well as performing service and repair activities on the company's products and maintaining relationships with various OEMs throughout the world. About 50% of the business comprises Engines, 18% of Power Generation, 17% Components, and 10% Distribution. The company generates 46% of sales from the US market and 54% from countries outside US.

Read full report on Cummins Inc

Company overview provided by

Company Products/Services/Markets:

Cummins is a global power leader that designs, manufactures, sells and services diesel engines and related technology around the world. Cummins serves its customers through its network of 550 company-owned and independent distributor facilities and more than 5,000 dealer locations in over 160 countries and territories.

Cummins Inc. is organized into four distinct but complementary business units.

Cummins Engine Business manufactures and markets a complete line of diesel and natural gas-powered engines for on-highway and off-highway use.  Its markets include heavy-and medium-duty truck, bus, recreational vehicle (RV), light-duty automotive and a number of industrial uses including agricultural, construction, mining marine, oil and gas and military equipment.  Cummins Engine Business also provides a full range of new parts and services and remanufactured parts and engines through an extensive distribution network.

Cummins engines range in size from 31 to 3,500 horsepower and from 1.4 liters to 91 liters.

Cummins Power Generation Business is a global provider of power generation systems, components and services in standby power, distributed power generation, as well as auxiliary power in mobile applications to meet the needs of a diversified customer base. Cummins Power Generation also provides a full range of services and solutions, including long-term operation and maintenance contracts and turnkey and temporary power solutions.

Cummins Power Generation products include diesel and alternative-fueled electrical generator sets form 2.5 to 2,700 kW, alternators from 0.6 KVA to 30,000 KVA, transfer switches from 40 amps to 3,000 amps, paralleling switchgear and generator set controls

The Components Business Segment consists of four businesses: Cummins Filtration, Cummins Turbo Technologies, Cummins Emission Solutions and Cummins Fuel Systems.

Cummins Filtration designs, manufactures and distributes heavy-duty air, fuel, hydraulic and lube filtration, chemicals and exhaust system technology products for diesel and gas-powered equipment.

Cummins Turbo Technologies designs and manufactures turbochargers and related products, on a global scale, for diesel engines above 3 liters.

Cummins Emission Solutions develops and supplies catalytic exhaust systems and related products to the medium-and heavy-duty commercial diesel engine markets.  The exhaust systems include packaging of catalytic exhaust systems, engineered aftertreatment components and system integration services for engine manufacturers.

Cummins Fuel Systems designs, develops and manufactures new fuel systems and remanufactures electronic control modules in the United States.  In Mexico, it remanufactures Cummins fuel systems and others.  This business services engines ranging from 9 to 78 liters.

Cummins Distribution Business drives a comprehensive global distribution strategy and channel management.  Capitalizing on synergies in parts and services, this business helps Cummins by providing outstanding support to our customers, while growing a less cyclical and less capital intensive business

The business consists of 17 Company-owned distributors and 10 joint ventures, covering 90 countries and territories through 233 locations.  Through this network, trained personnel sell and distribute Cummins-branded products, related services and broader solutions such as maintenance contracts, engineering services and customized integrated products. [10]

Strategy:

Describe Key Aspects of Company's Strategy Here

Competitors:

Caterpillar is the main competitor in power generation.

Industry Trends and News:

US businesses are buying Cummins' standby generators to ensure against power disruption. In addition, massive infrastructure build up in emerging markets are fueling demand for backup and off-grid power generation. This often provides more reliable power than the grid itself. [20]

Acquisitions, Divestitures, Major Transactions, Spin-offs :

Enter Acquisitions, Divestiures, Major Transactions, Spin-offs Here

Management – Pros & Cons, Changes:

Enter Management - Pros & Cons, Changes Here

Buy Rationale:

Given the company's track record, expected growth rate, and current P/E the company looks like a great value.

Sell Rationale:

Enter Sell Rationale Here