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UPDATE 2-Cummins shares rise on sales growth targets
* Cummins COO says company performance ahead of plan
* Cummins shares up more than 6 percent in trading
* Cummins targets $30 billion in sales by 2015 (Updates with stock price, details of long-term targets for company, and trends expected to spark company growth)
By John D. Stoll
Sept 13 (Reuters) - Diesel engine maker Cummins Inc (CMI.N) gave aggressive sales growth targets for the middle of the decade and confirmed that 2011 is on pace to be a record year, sending its shares up more than 6 percent.
During a conference with investors, the company said it has set a target of $30 billion in sales by 2015, representing a 14 percent annual growth rate during the period. By 2015, Cummins expects earnings before interest and taxes to equal 18 percent of sales.
Cummins reported $13.2 billion in sales in 2010. Shares of Cummins were trading up more than 6 percent at $92.32 on Tuesday morning.
During the presentation, Cummins President and Chief Operating Officer Tom Linebarger said 2011 will be another record year for the company despite market volatility and a mixed economic landscape around the world.
Linebarger, said that the company's financial performance for 2011 will exceed key metrics the company originally said it was planning to achieve in 2014.
"We have a management team that is committed to hitting targets" despite market volatility, he said.
Linebarger said that construction markets in North America continue to struggle to recover, while the truck market recovery is under way and the company's orders look good.
Growth in China and India has "clearly slowed," he said, as government policy makers in those countries have tightened monetary policy and scrambled to rein in inflation. This trend has slowed growth in the truck and construction markets, he said.
The company identified several trends that will lead to future growth.
Tighter diesel emissions standards will allow the company to better leverage the technology it offers to customers, the company said. At the same time, Cummins' distribution network is expected to allow the company to take advantage of globalization.
The company expects rising energy prices in the future, which could increase the demand for fuel-efficient engines. An increasingly constrained supply of energy could benefit the company's power generation business.
Finally, increasing infrastructure investments in several markets around the world could drive additional demand for Cummins products.
(Reporting by John Stoll in Detroit; editing by Dave Zimmerman)
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