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Looking ahead, management anticipates full-year fiscal 2008 production to be consistent with the company's operating plan. The company has authorized a $10 billion share repurchase program for fiscal 2008, and expects to repurchase between $2 billion and $3 billion in the third quarter. Bear in mind that crude oil and natural gas prices are highly volatile and cyclical in nature. A downturn from the currently high pricing trends could affect the future profitability of the company, as could further slowdown of the U.S. economy.

Cummins (CMI) designs, manufactures, distributes and services diesel and natural gas engines, electric power generation systems and engine-related products. These products include filtration emissions solutions, fuel systems, controls and air-handling systems. The company is headquartered in Columbus, Ind., and serves customers in more than 160 countries through a network of 550 company-owned and independent distributor facilities and more than 5,000 dealer locations.

Cummins has been rated a buy since March 2004. Despite its low profit margins in the second quarter of fiscal 2008, we are impressed by the company's revenue growth, stock price performance, and improved earnings per share (EPS). The company reported that its second quarter financial results were the best in company history, largely due to strong global demand. Cummins' revenue rose 16.3% year over year. That appears to have helped boost the company's EPS, which improved 39.9% compared with the prior-year's quarter. EPS rose to $1.49 in the second quarter from $1.07 in the same quarter of fiscal 2007. Net income rose 36.9%, rising from $214.00 million a year ago to $293 million. Additionally, the company appears to be very successful in managing its debt levels and has the ability to avoid short-term cash problems.

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