Cummins benefiting from China's huge demand for engines (CMI 2Q05 conf call)

Here are key quotes from Cummins' (ticker: CMI) management led by Chairman and CEO Tim Solso (from the company's Q2 2005 earnings results conference call):

On emissions compliance

....Our emissions compliant heavy duty engines continue to demonstrate
leadership in engine reliability, performance and fuel economy.

On major market demand for its engine products

....All major markets remain strong, buoyed by economic activity in the
U.S. and related markets, economic development in the Middle East and
power shortages in China.

On China's demand for engines

....The commercial marine market saw a 43% increase in sales compared to last year on a 14% increase in units. The favorable mix is a result of demand shift in China and Asia Pacific from mid-range to high horsepower engines which command significantly higher revenues per engine.

....We have expanded turbocharger capacity in China, the same with alternators.

....Our income from joint ventures and alliances in the second quarter was $35 million compared with $29 million in the second quarter last year. The increase in income was predominantly from the China joint ventures as we continue to benefit from higher production for both automotive and industrial markets.

On Chinese government regulations

....There has been some issues, just more kind of near-term issues involving a regulation change in China. But we think that that's going to get sorted out and, in fact, the demands felt pretty strong.

(Quotes are from the CCBN StreetEvents transcript.)

Comment: Why is China buying diesel engines from Cummins? See here.

CMI chart.

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