COLUMBUS, Ind. – Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2024.
“We achieved record quarterly sales and solid profitability in the second quarter, led by significant improvement in our Power Systems business,” said Jennifer Rumsey, Chair and CEO of Cummins. “As we shared during our Analyst Day in May, our Destination Zero strategy is the right strategy for growing our business and meeting our customers’ needs today and in the future. We continue to deliver innovative technologies for our customers, execute on our financial commitments, and strengthen our position in key markets. I want to thank our talented employees for their continued efforts to drive business results and make Cummins more competitive across the globe.”
Second quarter revenues of $8.8 billion increased 2% from the same quarter in 2023. Sales in North America increased 4% while international revenues decreased 2%.
Net income attributable to Cummins in the second quarter was $726 million, or $5.26 per diluted share, compared to $720 million, or $5.05 per diluted share, in 2023. The second quarter of 2023 included costs related to the separation of Atmus of $23 million, or $0.13 per diluted share. The tax rate in the second quarter was 23.0% including $9 million, or $0.07 per diluted share, of favorable discrete tax items.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.3 billion, or 15.3% of sales, compared to $1.3 billion, or 15.1% of sales, a year ago. EBITDA for the second quarter of 2023 included the costs related to the separation of Atmus noted above.
2024 Outlook:
Based on its current forecast, Cummins is raising its full-year 2024 revenue guidance to be down 3% to flat, due to stronger than expected demand across several markets, especially in North America on-highway and power generation. EBITDA is expected to be in the range of 15.0% to 15.5%, raising the midpoint and narrowing the range of the previous guidance of 14.5% to 15.5%.
Cummins plans to continue generating strong operating cash flow and returns for shareholders and is committed to our long-term strategic goal of returning 50% of operating cash flow back to shareholders. In the near term, we will focus on reinvesting for profitable growth, dividends and reducing debt.
“We have raised our expectations on revenue and profitability for 2024 due to continued demand for Cummins’ products and services. We still expect slowing demand in the North America heavy-duty truck market in the second half of the year,” said Rumsey. “Despite the lower outlook for the second half, Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders.”
Second Quarter 2024 Highlights:
- Cummins announced an increase in the quarterly common stock cash dividend from $1.68 to $1.82 per share. The company has increased the quarterly dividend to shareholders for 15 consecutive years.
- Accelera
by Cummins, Daimler Trucks & Buses and PACCAR completed the formation of their joint venture, now known as Amplify Cell Technologies, to localize battery cell production and the battery supply chain in the United States. This strategic collaboration will advance zero-emissions technology for electric commercial vehicles and industrial applications. Amplify began construction of a 21-gigawatt hour (GWh) factory in Marshall County, Miss., with potential for further expansion as demand grows. The factory is expected to create more than 2,000 U.S. manufacturing jobs and is targeting the start of production in 2027. - Cummins and Isuzu announced the launch of a new 6.7-liter engine designed for use in Isuzu’s new medium-duty truck lineup. The “Isuzu DB6A” will power on-highway truck applications built for the Japanese market and will be available for the Asia Pacific markets and other global markets later this year. Cummins also announced plans to launch a battery electric powertrain for Isuzu’s F-series in North America. Availability of the medium-duty truck is expected in 2026 and will include Accelera’s next generation lithium iron phosphate (LFP) battery technology.
- Cummins hosted its biennial Analyst Day and shared plans to raise its long-term financial expectations, relative to its prior Analyst Day, and deliver increasing returns to shareholders.
- For the third consecutive year, Morgan Stanley Capital International (MSCI) awarded Cummins a AAA rating – the highest in the industry – for the ability to manage the most significant environmental, social and governance risks and opportunities relative to peers.
- In July, Accelera was awarded $75 million for zero-emissions manufacturing from the Department of Energy to convert approximately 360,000 sq. ft. of existing manufacturing space at our Columbus (Indiana) Engine Plant for zero-emissions components and electric powertrain systems. The $75 million grant is the largest federal grant ever awarded solely to Cummins and is part of the appropriations related to the Inflation Reduction Act.
1Generally Accepted Accounting Principles in the U.S.
Second quarter 2024 detail (all comparisons to same period in 2023):
Components Segment
- Sales – $3.0 billion, down 13%
- Segment EBITDA – $406 million, or 13.6% of sales compared to $486 million, or 14.2% of sales, which included the Atmus business and $18 million of costs related to the separation of Atmus
- Revenues in North America decreased by 10% and international sales decreased by 17% primarily due to the separation of Atmus and lower demand in China and Europe.
Engine Segment
- Sales – $3.2 billion, up 5%
- Segment EBITDA – $445 million, or 14.1% of sales, compared to $425 million, or 14.2% of sales
- Revenues increased 7% in North America and increased 2% in international markets due to strong demand in the North American medium-duty truck market and pricing actions.
Distribution Segment
- Sales – $2.8 billion, up 9%
- Segment EBITDA – $314 million, or 11.1% of sales, compared to $299 million, or 11.5% of sales
- Revenues in North America increased 6% and international sales increased by 16% driven by increased demand for power generation products and pricing actions.
Power Systems Segment
- Sales – $1.6 billion, up 9%
- Segment EBITDA – $301 million, or 18.9% of sales, compared to $201 million, or 13.8% of sales
- Power generation revenues increased 16% driven by increased global demand, particularly for the data center market. Industrial revenues increased 2% primarily due to strong mining demand more than offsetting weaker demand in oil and gas markets.
Accelera Segment
- Sales – $111 million, up 31%
- Segment EBITDA loss – $117 million
- Revenues increased due to increased electrolyzer installations
- Costs associated with the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery electric vehicles are contributing to EBITDA losses.
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