Cummins Inc.’s sales and profits are rising as the company embarks on ambitious investments in three United States plants including its plant near Jamestown.

The company announced its first quarter financial results on Tuesday. First quarter revenues of $8.5 billion increased 32% from the same quarter in 2022. Sales in North America increased 39% and international revenues increased 24% due to the addition of Meritor and strong demand across all key global markets.

That performance is allowing Cummins to reinvest in its manufacturing operations. The company is investing more than $1 billion across its U.S. engine manufacturing network in Indiana, North Carolina and the Jamestown Engine Plant, which will see $450 million in new investment to support Cummins’ fuel agnostic engine platforms that will run on low carbon fuels, including natural gas, diesel and eventually hydrogen.

“The other thing that’s going on within our margins, of course, quite significant investment, we’ve got a lot of new products that we’re excited about, and some of our customers are excited about,” said Mark Smith, Cummins CFO. “So the engineering cost of elevated.

So that is the other factor that’s really particularly in the engine components. … But I think looking at the margins, you’ve got to take into effect, how much are we investing? Because I think how much others are investing is also a signal about who’s investing for more growth. And right now, we are putting more into the engineering across the business because we’re excited about the future.”

Based on its current forecast, Cummins is raising its full year 2023 revenue guidance to be up 15% to 20%, an increase from our prior projections of up 12% to 17% due to stronger demand across most markets. EBITDA is expected to be in the range of 15% to 15.7%, an increase from the prior range of 14.5% and 15.2%.

Net income attributable to Cummins in the first quarter was $790 million, or $5.55 per diluted share compared to $418 million, or $2.92 per diluted share, in 2022, which included $158 million, or $1.03 per diluted share, of costs related to the indefinite suspension of operations in Russia. The company plans return 50% of operating cash flow back to shareholders.

“During the quarter, we returned $222 million to shareholders in the form of dividends, consistent with our long-term plan to return approximately 50% of operating cash flow to shareholders,” said Jennifer Rumsey, Cummins president and CEO. “Strong execution resulted in record sales, EBITDA, net income and earnings per share in the first quarter, despite the continued challenging operating environment. I’m impressed and grateful for the commitment of our employees and leaders around the world who are delivering for our customers and generating strong financial performance at the same time.”

In March, Cummins announced the launch of Accelera by Cummins, a new brand for its New Power business unit. Accelera provides a diverse portfolio of zero-emissions solutions for many of the world’s most vital industries empowering customers to accelerate their transition to a sustainable future. Accelera announced that it will supply a 90-megawatt (MW) proton exchange membrane (PEM) electrolyzer system for Varennes Carbon Recycling’s (VCR) plant in Quebec, Canada – a key step in advancing North America’s green hydrogen economy.

The new brand was the subject of an early-year advertising campaign that included the Jamestown area.

“For Accelera, we are expecting full year sales to be $350 million to $400 million, consistent with our prior guidance,” Rumsey said. “Revenues are expected to approximately double from 2022 due to higher battery demand in North America school bus market and the additions of the electronic powertrain portion of the Meritor business and Siemens commercial vehicle business. The electrolyzer market continues to gain momentum as well with the near-term forecast on expanding capacity to meet the growing demand.”