Cummins reports record first quarter revenue

While many trucking companies have reported low earnings and freight volume, engine maker Cummins Inc. is reporting record first-quarter revenue.

Columbus, Ind.-based Cummins reported first-quarter revenue of $8.5 billion, which is 32% more than the first quarter 2022. First-quarter revenue set a company record.

Sales in North America increased 39% and international revenues increased 24% from the same period a year ago. The company credits the addition of Meritor and strong demand across all key global markets for the revenue surge.

Cummins completed its acquisition of Troy, Mich.-based Meritor Inc. in summer 2022. Meritor specializes in direct-drive and transmission-based remote mount electric motors, inverters, software and related services that are needed for electric powertrains.

Because of the strong showing, the company is raising its full-year 2023 revenue expectation to 15-20% more. Previously, the company expected gains of 12-17%.

“We are delivering cycle-over-cycle improvement in financial performance despite persistent supply chain constraints, and we continue to invest in sustainable solutions that will protect our planet for future generations and support the success of our customers,” Jennifer Rumsey, Cummins president and CEO, said in a company statement.

Cummins engine, Accelera segments

In the engine segment, which manufactures diesel- and natural gas-powered engines for on-highway and off-highway use, sales were $3 billion, up 8% from the first quarter of 2022. Engine sales grew 9% in North America and 8% in international markets, which was due to strong demand in China and India

In the Accelera segment, which is the rebranded name of its New Power business unit, sales were $85 million. That is up 174% from the first quarter a year ago. The increase is credited by the company to higher demand for battery electric systems in the North American school bus market and the additions of the electric powertrain portion of the Meritor business and Siemens Commercial Vehicle business.

It isn’t all rosy news for the Accelera segment, however. Earnings before interest, taxes, depreciation and amortization were down 94%. The losses were blamed on costs associated with the development of electric powertrains, fuel cells and electrolyzers (which produce hydrogen for fuel), as well as products to support battery electric vehicles.

In other segments:

• The distribution segment produced first-quarter sales of $2.4 million, 14% more than the same period a year ago.
• The power systems segment, which provides high-horsepower engines and power generation equipment, had sales of $1.3 billion, up 16% from a year ago.
• The components segment – which includes Cummins Filtration, Cummins Turbo Technologies, Cummins Emission Solutions and Cummins Electronics and Fuel Systems – produced sales of $3.6 billion, up 79% from first quarter 2022. Cummins is planning to separate the filtration business. Within the components segment, the company expects revenues from the Meritor business for 2023 to be $4.7 billion to $4.9 billion, an increase from $4.5 billion to $4.7 billion from previous expectations. Earnings before taxes and depreciation is expected to be 10.3% to 11% of sales.

“Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders,” Rumsey said in the company statement. LL

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