Cummins Reports Strong Second Quarter Results
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Cummins Inc. reported second quarter net income and sales soared, fueled by engine sales in North America.
At the same time, the company announced that it was exploring what it called “strategic alternatives” for its filtration business unit, which it launched in 1958. The division achieved annual sales of $ 1.2 billion in 2020.
Quarterly net income for the period ended June 30 jumped to $ 600 million, or $ 4.10 per diluted share, from $ 276 million, $ 1.86, a year earlier.
Revenue increased 59% to $ 6.1 billion from the period 2020. North America sales increased 74% while international revenue increased 42% thanks to strong demand on all global markets compared to the same quarter in 2020, which was heavily impacted by the pandemic, the Columbus, Ind.
“The strength of the order book reflects strong underlying demand in many of our markets, which is remarkable given the challenges and uncertainty we faced during the same period last year.” Chief Executive Officer Tom Linebarger said in a statement. “I cannot thank our employees and our supply base employees enough for their unwavering contribution during these difficult times, given the significant supply chain constraints we continue to face in our industry. “
Cummins’ largest engine segment improved revenue 75% to $ 2.5 billion from a year ago. On-road revenue increased 104% due to strong demand in North American truck and light truck markets and off-road revenue increased 10% due to strong demand in international markets of construction, according to the company.
In the components segment, revenue increased 73% to $ 2 billion from the previous year.
The distribution segment achieved sales of $ 1.9 billion, up 20%.
The electrical systems segment generated revenue of $ 1.1 billion, up 47%.
Fuel cells traveled to the moon and back in 1969, and now @Cummins takes the next step in advancing solid oxide fuel cell (SOFC) technology to help power a more sustainable world. Read more: https://t.co/aPSJFTrxJw # GenerationH #Green energy pic.twitter.com/t02G1ATb4S
– Cummins Inc. (@Cummins) July 29, 2021
The new electric segment, Cummins’ smallest, saw sales climb 140% to $ 24 million from the 2020 quarter. school buses, Cummins noted, in addition to shipments of fuel cell systems to the rail market, electrolyzer revenues have declined due to the projects’ commissioning schedule.
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Meanwhile, potential strategic alternatives to explore with its filtration business include splitting the business into a stand-alone company. This would come with a broad portfolio of products for use in on-road trucks, heavy, medium, and light trucks, off-road industrial equipment, and power generation systems.
“The company enjoys a large installed base with comprehensive aftermarket coverage, generating recurring revenue and cash flow visibility,” Cummins said in a statement, “and has a leading global footprint in many key regions including North America, India and China. Cummins Filtration is well positioned for continued growth, sustained margin performance and strong free cash flow generation. “
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