This excerpt taken from the CMI 10-Q filed May 9, 2006.
The net sales, investee income and segment EBIT for Components were as follows:
Our Components segment includes the following businesses: fuel systems, filtration, aftertreatment devices and turbochargers. Components net sales increased across all businesses and all geographic markets, but were primarily driven by strong demand in North America and Latin America for our filtration products. Sales of our turbochargers increased due to increased aftermarket demand worldwide and increased OEM sales.
Segment EBIT improved during the first quarter compared with same period in 2005, primarily due to improved volume. In addition, EBIT as a percentage of net sales increased slightly. Gross margin increased $19 million, or 23 percent, in the first quarter compared to the same period in 2005, and gross margin percentage improved almost one percentage point compared to the same period in 2005, primarily due to volume and mix. Selling and administrative expenses increased $5 million, or 11 percent, compared to the first quarter of 2005, but decreased slightly as a percentage of net sales. Research and engineering expenses increased due to an increased investment in the development of a number of new products and critical technologies that will be launched in 2007 and beyond. Research and engineering expenses increased $6 million, or 46 percent, compared to the first quarter of 2005 and increased by nearly one percentage point as a percentage of net sales.