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Cummins Inc. increased its third quarter revenues by 15%, but the good times may slow a bit in the coming months.
Third quarter revenues of $8.4 billion increased 15% from the same quarter in 2022. Sales in North America increased 16% percent and international revenues increased 13% due to the addition of Meritor and strong demand across most global markets.
"We delivered solid profitability and record operating cash flow in the third quarter," said Jennifer Rumsey, Cummins Inc. chair and CEO. "While full year revenues are at the high end of our expectations, we are seeing signs of moderating demand in some markets and are taking steps to reduce costs and position the company for success in 2024. I am deeply appreciative of our Cummins employees, who continue to innovate for our customers and demonstrate the flexibility required to meet global demand."
Net income attributable to Cummins in the third quarter was $656 million, or $4.59 per diluted share compared to $400 million, or $2.82 per diluted share in 2022. Earnings before interest, taxes, depreciation and amortization, a key figure when analyzing a company's cash flow, in the third quarter were $1.2 billion, or 14.6% of sales, compared to $884 million, or 12.1% of sales, a year ago. The third quarter of 2022 also included a one-time employee recognition bonus with a cost impact of $56 million.
Operating cash flow for the third quarter of 2023 was a record inflow of $1.5 billion, compared to $382 million in the third quarter of 2022.
Based on its current forecast, Cummins is raising its full year 2023 revenue guidance to increase between 18% and 21% due to strong demand across most markets, especially North America. EBITDA is expected to be in the range of 15.2% to 15.4% of sales, narrowing the range of the previous guidance of 15% to 15.7% of sales.
"2023 will be another record year for revenue growth, however we are seeing some signs of slowing activity and are expecting lower demand in the fourth quarter. Our leadership team is experienced in managing through periods of economic uncertainty and will continue to make the decisions that ensure we drive cost improvements and maintain a strong financial position. We've announced several major partnerships this quarter as we continue to advance our Destination Zero strategy and remain committed to investing in future growth," Rumsey said.
Third quarter highlights include:
Freightliner announced a partnership with Cummins to offer the new Cummins X15N natural gas engine in its heavy-duty Freightliner Cascadia trucks. Also, Cummins Inc. and Knight Transportation, Inc. announced that the industry's largest full truckload company has successfully tested Cummins' new X15N engine in Southern California, using renewable natural gas to realize reductions in nitrous oxides and greenhouse gas without compromising performance. The X15N, which will launch in North America in 2024 and will be built at the Jamestown Engine Plant, is the first natural gas engine to be designed specifically for heavy-duty and on-highway truck applications.
Accelera, a partnership between Cummins, Daimler Trucks & Buses, PACCAR and EVE Energy, announced in September a joint venture to accelerate and localize battery cell production and the battery supply chain in the United States. The planned joint venture will manufacture battery cells for electric commercial vehicles and industrial applications. Total investment by the partners is expected to be in the range of $2-3 billion for the 21-gigawatt hour (GWh) factory with production expected to begin in 2027.