Cummins Chairman and CEO Tom Linebarger unveils the company’s environmental strategy in 2019. Photo courtesy Cummins.com

Cummins Inc. weathered supply chain issues to increase revenues 21% last year while projecting another 6% in revenue growth in 2022.

Cummins officials recently reported 2021 revenues of $24 billion, 21% higher than 2020. Sales in North America increased 17% and international revenues increased 27%. Sales increased in all major regions compared to the prior year, which was impacted by the height of the COVID-19 pandemic.

“Strong economic recovery, combined with high demand for our products, resulted in record full year revenues in 2021,” said Tom Linebarger, Cummins chairman and chief executive officer. “On the other hand, our industry continues to experience significant supply chain constraints, driving elevated manufacturing, logistics and material cost and resulting in margins below our expectations, particularly in the fourth quarter. We have taken a number of actions to significantly improve our margins in 2022 and expect to generate strong incrementals through increased pricing as well as surcharges, combined with cost reduction initiatives in our supply chain and operations. Having effectively managed through a challenging 2021, we expect improved performance in 2022 and are well-positioned to invest in future growth, while continuing to return cash to shareholders.”

Fourth quarter revenues of $5.9 billion were flat with the same quarter in 2020. Sales in North America decreased 4 percent while international revenues increased 6 percent driven by strong demand across most global markets, with the exception of China, compared to the same quarter in 2020.

Those fourth-quarter challenges will continue for a bit longer, according to company officials. Based on the current forecast, Cummins projects 2022 revenues to increase 6% and for revenues to increase in all regions and major markets except China, where demand is expected to moderate after a record year in 2021.

“We anticipate profitability will be lower in the first half of 2022 than the second half with some of the challenges we saw in 2021 continuing into the first quarter of 2022,” said Chris Clulow, Cummins corporate controller. “We expect earnings from joint ventures to decline 15% to 20% in 2022, primarily due to a decline in demand in China truck and construction markets and the transition of our natural gas engine joint venture in North America to fully consolidate in 2022.”

Among the company’s 2021 highlights are:

¯ Announcing a 15-liter natural gas engine for heavy-duty trucks. The 15-liter natural gas engine is an important part of Destination Zero, Cummins strategy for the best way to decarbonize the trucking industry, focusing on reducing carbon from the technologies that are widely available today, while investing in the infrastructure capabilities and technologies with the potential to reach zero. The strategy focuses on new powertrains including advanced diesel, natural gas, hydrogen engines, hybrids, battery electric, and fuel cells along with an increased use of low carbon fuels and renewable electricity. The expanding product lineup will help achieve Cummins’ PLANET 2050 environmental goals which include lowering emissions from newly sold products by 30% by 2030 and a goal of carbon neutrality by 2050, aligned with the Paris Climate Accord targets.

¯ Cummins and Sinopec announced the formation of a 50:50 joint venture, Cummins Enze, to accelerate the affordability and availability of green hydrogen in China. The joint venture will invest in an electrolyzer plant with annual capacity starting at 500 megawatts in 2023, and scalable to one gigawatt within 5 years after completion. Cummins Enze will also provide a variety of hydrogen generation system solutions to meet diversified application requirements for both small and large scale hydrogen production.