Cummins ’21 revenues increased by 21%
By Mike Brezonick03 February 2022
Cummins Inc. reported that revenues for 2021 year were $24 billion, 21% percent higher than 2020. Sales in North America increased 17% and international revenues rose 27% percent. Sales increased in all major regions compared to the prior year, which was severely impacted by the height of the COVID-19 pandemic.
Net income attributable to Cummins for the full year was $2.1 billion compared to net income of $1.8 billion in 2020.
Fourth quarter revenues of $5.9 billion were flat with the same quarter in 2020. Sales in North America decreased 4% while international revenues increased 6%, driven by strong demand across most global markets, with the exception of China, compared to the same quarter in 2020.
Net income attributable to Cummins in the fourth quarter was $394 million compared to $501 million in 2020.
“Strong economic recovery combined with high demand for our products resulted in record full year revenues in 2021,” said Chairman and CEO Tom Linebarger. “Our industry continues to experience significant supply chain constraints resulting in elevated manufacturing, logistics, and material costs resulting in margins below our expectations, particularly in the fourth quarter.
“We have taken actions to improve margins in 2022 and expect to generate strong incremental margins through increased pricing, surcharges, a number of cost reduction initiatives and operational improvements. Having effectively managed through a challenging 2021, Cummins is in a solid position to keep investing in future growth while continuing to return cash to shareholders.
“The transition to low carbon power across industries will be a significant driver in the fight against climate change and will require a broad mix of innovative technologies to achieve these goals. This decarbonization effort represents a significant growth opportunity for Cummins as many of our OEM partners and end customers look to achieve their climate goals, while still having power solutions that fulfill their needs. Cummins key capabilities uniquely position us to lead in the transition to zero emissions.”
Linebarger spoke with Diesel Progress about the company’s commitment to new power technologies and decarbonization in a podcast, which can accessed here.
Based on its current forecast, Cummins projects full year 2022 revenues to be up 6%. The company said it expects revenues to increase in all regions and major markets except China where demand is forecast to moderate after a record year in 2021.
Q4 segment results
Engine Segment: Sales were $2.4 billion, up 4%. On-highway revenues increased 5% and off-highway revenues were up 2%. Sales in North America fell 4% while international sales increased 26% driven by demand across Australia, Europe, and Latin America.
Distribution Segment: Sales were $2.1 billion, up 3%. Revenues in North America slipped 1% while international sales increased by 10% driven by strong demand in Russia. Increased engine and aftermarket demand offset a decline in power generation.
Components Segment: Sales fell 6% to $1.7 billion. Revenues in North America rose 1% and international sales dropped 12% due to lower demand in China.
Power Systems Segment: Sales rose 10%, to $1.1 billion. Power generation revenues decreased by 6% while industrial revenues increased 37% driven by strong mining demand.
New Power Segment: Sales were flat from the same period in 2020, finishing at $34 million. Continued investment in the development of fuel cells and electrolyzers as well as products to support battery electric vehicles is expected to support strong growth in 2022 and beyond and is contributing to current EBITDA losses, which were $54 million in the fourth quarter.