COLUMBUS, Ind. — Cummins Inc. reports a strong third quarter with net income attributable to Cummins in the third quarter at $809 million.
“We achieved strong sales and profitability in the third quarter, led by improvement in our Power Systems and Distribution businesses, and have adjusted our full year projection for EBITDA percentage to be at the top end of the prior range,” said Jennifer Rumsey, chair and CEO of Cummins. “We continue to advance our Destination Zero strategy as we deliver innovative technologies for our customers, strengthen our position in key markets and drive improvement in our financial performance.”
According to a media release, third quarter revenues of $8.5 billion were flat to the same quarter in 2023. Sales in North America decreased 1% while international revenues increased 2%.
Net income attributable to Cummins in the third quarter was $809 million, or $5.86 per diluted share, compared to $656 million, or $4.59 per diluted share, in 2023. The tax rate in the third quarter was 19.2% including $36 million, or $0.26 per diluted share, of favorable discrete tax items. The third quarter of 2023 included costs related to the separation of Atmus of $26 million, or $0.14 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the third quarter were $1.4 billion, or 16.4% of sales, compared to $1.2 billion, or 14.6% of sales, a year ago. EBITDA for the third quarter of 2023 included the costs related to the separation of Atmus noted above.
2024 Outlook
Based on its current forecast, Cummins is maintaining its full-year 2024 revenue guidance to be in the range of down 3% to flat. EBITDA is expected to be approximately 15.5%; at the top end of the previous guidance of 15.0% 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, the company will focus on reinvesting for profitable growth, dividends and reducing debt.
“We solidified our expectations on profitability for 2024 to the top end of our prior range thanks to continued improvements in Power Systems and Distribution segments. Although we faced slowing demand in the North American heavy-duty truck market during the third quarter and anticipate this trend to persist into the fourth quarter, Cummins remains well-positioned to deliver strong financial performance, invest in future growth and return cash to shareholders,” Rumsey said.
Third Quarter 2024 Highlights:
- Cummins increased its 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.
- Cummins started full production of the X15N natural gas engine at its Jamestown Engine Plant, which celebrated its 50th anniversary in the third quarter. The Cummins X15N is part of the X-series Cummins’ HELM lineup, a global engine platform that is derived from a common base and offers multiple fuel types including natural gas, advanced diesel and hydrogen.
- Cummins attended IAA Transportation 2024 in Hannover, Germany, to showcase a diverse portfolio of powertrain and component technologies as part of the company’s Destination Zero strategy to progress industry decarbonization. Highlighted products at the booth included Euro-7 ready X10 and the X15H hydrogen internal combustion engines, a hydrogen fuel cell engine, next-generation lithium iron phosphate battery solutions, eAxles, eTurbocharger, eCompressor and hydrogen fuel storage solutions, as well as fully integrated powertrains.
- Accelera by Cummins celebrated the opening of its new electrolyzer manufacturing plant in Guadalajara, Castilla-La Mancha, Spain. The plant has the capacity to produce 500 megawatts (MW) of electrolyzers per year, scalable to more than 1 gigawatt (GW) per year in the future.
- Cummins was recognized as one of the 2024 100 Best Companies by Seramount, an organization focused on empowering inclusive workplaces; named a Veteran Friendly Employer by U.S. Veterans Magazine; and ranked #55 on Glassdoor’s Best Places to Work in 2024.
Third quarter 2024 detail (all comparisons to same period in 2023):
Components Segment
- Sales – $2.7 billion, down 16%.
- Segment EBITDA – $351 million, or 12.9% of sales compared to $441 million, or 13.6% of sales, which included the operating results of the Atmus business and $20 million of costs related to its separation.
- Revenues in North America decreased by 14% and international sales decreased by 18% primarily due to the separation of Atmus and lower demand in heavy-duty truck.
Engine Segment
- Sales – $2.9 billion, down 1%.
- Segment EBITDA – $427 million, or 14.7% of sales, compared to $395 million, or 13.5% of sales.
- Revenues decreased 2% in North America and increased 4% in international markets due to softening demand in the North American heavy-duty truck market and strength in global medium-duty truck markets.
Distribution Segment
- Sales – $3.0 billion, up 16%.
- Segment EBITDA – $370 million, or 12.5% of sales, compared to $306 million, or 12.1% of sales.
- Revenues in North America increased 13% and international sales increased by 25% driven by increased demand for power generation products, particularly for data center applications, and pricing actions.
Power Systems Segment
- Sales – $1.7 billion, up 17%.
- Segment EBITDA – $328 million, or 19.4% of sales, compared to $234 million, or 16.2% of sales.
- Power generation revenues increased 24% driven by increased global demand, particularly for the data center market. Industrial revenues increased 7% primarily due to strong mining demand more than offsetting weaker oil and gas markets.
Accelera Segment
- Sales – $110 million, up 7%.
- Segment EBITDA loss – $115 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.
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
