Cummins (CMI) said strong sales of diesel generators in overseas markets boosted its fourth-quarter profit by 5 percent. Sales in Cummins' Global Power Generation unit surged 28 percent in the fourth quarter to $840 million, driven by strong gains "around most of the world" and significant growth in alternator sales in Europe and China.
The company said its power segment saw strong sales gains in virtually every line of business, led by a 31 percent increase in commercial sales and a 34 percent rise in alternator sales.
With its core market of truck sales lagging, Cummins has benefited from record sales of generators, supported by strong demand from the data center sector.
Cummins projected that its power generation will remain "extremely strong" in 2008, with demand being driven by global infrastructure needs. Cummins is positioned to benefit from its early commitment to China, one of the strongest markets for diesel engines. Cummins says it is the largest foreign investor in the China diesel engine industry.
The data center building boom has created backlogs for the large generators that provide emergency backup power, with some facility operators reporting lengthy delays on new units of the most popular 2 megawatt models.