Sales of generators and engines outside of North America helped engine maker Cummins survive the precipitous drop in U.S. truck sales in the first quarter – a market that still comprises the bulk of its business.

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Cummins reported 1Q net income of $143 million on sales of $2.82 billion, up 5.9% and 5.2%, respectively, compared to the same period in 2006.

“Our first-quarter performance demonstrated the benefits of our ongoing effort to lower our cost structure and to diversify into business beyond the North American heavy-duty truck engine market,” said Tim Solso, chairman & CEO.

“The heavy-duty truck market– still the company’s largest– declined, as expected, due to lower truck sales resulting from new diesel emissions standards. However, results from our other operations still resulted in higher sales and net income for the quarter,” he noted.

Cummins said global heavy- and medium-duty truck engines shipments decreased 45% and 7%, respectively, while engine shipments to the global construction and oil and gas markets increased 25% and 11%, respectively. Overall global engine sales dropped 3% to $1.76 billion, while pre-tax profits fell 28% to $128 million.

Significantly stronger results in the company’s exhaust aftertreatment business more than offset the expected decline in heavy-duty volumes in the fuel systems division, Solso noted, along with higher material and new product costs in the company’s turbocharger technologies division.

Several areas of growth balanced out the decline in engine business, said Solso, particularly power generation, where pre-tax earnings rose 71% to $77 million on 26% higher sales of $675 million. A significant increase in demand for its commercial generator sets and alternators came from North America, India and the Middle East. Consumer sales also improved and more growth is expected in future quarters from sales of portable generator sets and auxiliary power units for commercial trucks, he added.

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