Cummins sees Q2 revenues rise 8%
By Becky Schultz02 August 2022
Cummins Inc. saw its second quarter revenues grow 8% year over year to $6.6 billion, up from the $6.1 billion reported in Q2 2021, and led by a 15% increase in North America that helped to offset a 2% slip in international revenues. Net income for the quarter was $702 million ($4.94 per diluted share) compared to the $600 million ($4.10 per diluted share) reported for the same period in 2021.
“The company achieved record revenues and solid profitability in the second quarter of 2022, with demand for our products remaining strong across most of our key markets and regions, apart from China,” stated Jennifer Rumsey, who was named president and CEO effective Aug. 1. “Employees across our organization have worked tirelessly in the face of supply chain challenges and rising costs that continue to impact our industry. While navigating these challenges, we will continue to focus on enabling our customers’ success, driving cycle over cycle improvement in financial performance, investing in sustainable solutions that will protect our planet for future generations and returning excess cash to shareholders.”
EBITDA earnings in the second quarter were $1.1 billion (16% of sales) vs. $974 million (15.9% of sales) a year ago. Results take into account the $29 million cost related to the separation of the company’s Filtration business, a $47 million benefit due to adjusting reserves related to the indefinite suspension of operations in Russia and other factors.
The engine segment sales grow 11% in Q2 to $2.8 billion, supported primarily by a 15% increase in North America. On-highway revenues rose 16% globally, while off-highway revenues were pushed 8% lower by the slowdown in construction in China.
Other details included:
- Distribution segment climbed 17% to $2.3 billion based on a revenue increase of 21% in North America and 10% growth in international sales.
- Components segment saw sales dip 2% to $2.0 billion, as a 19% decline in international sales due to lower Chinese demand vs. 2021’s high level overshadowed a 13% gain in North America.
- Power Systems rose 5% to $1.2 billion, with industrial revenues rising 7% and alternator demand spiking by 33% due to supply chain constraints on external customers.
- New Power segment jumped 75% to $42 million, led by higher battery demand in the North American school bus market.
Cummins continues to maintain its full year 2022 guidance, forecasting an 8% revenue increase and EBITDA of approximately 15.5%. Any expenses outside of the normal course of business associated with the company’s separation of its Filtration business, the pending acquisition of Meritor or suspension of Russian operations are excluded from the outlook, the company reported.
“High inflation and rising global interest rates have increased uncertainty about the pace of growth in the global economy. Demand for Cummins’ products and services remains strong, and as a result we have maintained our projection for full year revenues and profitability from three months ago,” said Rumsey. “We continue to monitor economic conditions closely and will adjust our operating plans should the outlook for our core markets weaken.”