COLUMBUS, IN — Cummins reported strong first-quarter earnings of $135 million, or $2.70 per diluted share, which the company said was powered by sales growth across most of its markets and product lines, and continued gross margin strength. Sales for the quarter totaled $2.68 billion.

Based on its first-quarter performance and its forecast for the remainder of the year, Cummins also is increasing its 2006 full-year guidance. The company now expects to earn between $12.40 and $12.60 a share in 2006, up from its original guidance of $11.90 to $12.10 a share. The company expects to earn between $3.35 and $3.45 a share in the second quarter.

“As we have been saying for some time, we’re confident 2006 will be an even better year than our record 2005 and these results indicate that we are on our way to achieving our goals,” said Cummins Chairman and Chief Executive Officer Tim Solso. “Our first-quarter performance reflects considerable strength along the breadth of our product line and in markets around the world. We have become a less cyclical, more diversified company, and as our operating performance continues to improve and we strengthen our balance sheet, we are increasingly well-positioned for the future.”

In the first quarter, Indiana passed a tax bill that will, over time, lower Cummins’ effective tax rate in the state. As a result, however, Cummins’ first-quarter results include a one-time charge of approximately $12 million, or 23 cents a share, for adjustments required as a consequence of this legislation.

The company’s first-quarter performance was significantly stronger than the same period in 2005. For the first quarter, net income rose 39 percent from $97 million, or $1.96 per diluted share, during the first quarter of 2005. Revenues increased 21 percent, from $2.21 billion a year ago.

Earnings Before Interest and Taxes (EBIT) rose 56 percent to $255 million, from $163 million in the first quarter of 2005. EBIT as a percentage of sales was 9.5 percent, compared to 7.4 percent a year ago. Gross margins for the quarter also improved from the same period a year ago, increasing to 22.4 percent from 20.7 percent.

For more information about Cummins, go to: www.cummins.com.

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