Cummins reports strong Q3 2024 sales

Cummins Inc. has reported revenues of $8.5 billion for the third quarter of 2024, flat compared to the same period last year. Sales in North America decreased 1%, while international revenues grew 2%.

Net income in Q3 was $809 million for the quarter compared to $656 million in Q3 2023, which included $26 million in costs related to the separation of Atmus. EBITDA was $1.4 billion compared to $1.2 billion, or 14.6% of sales, in the third quarter of last year.

Jennifer Rumsey

“We achieved strong sales and profitability in the third quarter, led by improvement in our Power Systems and Distribution businesses, and have adjusted our full-year projection for EBITDA percentage to be at the top end of the prior range,” said Jennifer Rumsey, Chair and CEO of Cummins. “We continue to advance our Destination Zero strategy as we deliver innovative technologies for our customers, strengthen our position in key markets and drive improvement in our financial performance.”

Segment sales

Sales for the quarter were led by the Distribution segment, which saw a 16% increase to $3.0 billion. EBITDA was reported at $370 million (12.5%) of sales, compared to $306 million (12.1% of sales) in Q3 2023. Revenues in North America rose 13% and international sales jumped 25%, which Cummins said was driven by increased demand for power generation products, particularly for data center applications, as well as pricing actions.

Correspondingly, the Power Systems segment saw sales grow by 17% to $1.7 billion, with EBITA of $328 million (19.4% of sales) vs. $234 million (16.2% of sales) last year. Power generation revenues jumped 24%, driven by increased global demand, particularly in the data center market. Industrial revenues rose 7%, attributed largely to strong mining demand more than offsetting weaker oil and gas markets.

The Engine segment saw sales dip slightly (-1%) to $2.9 billion. EBITDA came in at $427 million (14.7% of sales) compared to $395 million, or 13.5% of sales, in Q3 2023. Engine segment revenues decreased 2% in North America due to softening demand in the heavy-duty truck market, the company noted, but grew 4% in international markets based on strength in the global medium-duty truck markets.

The Components segment, which has led the company in sales for much of 2024, decreased 16% to $2.7 billion, with EBITDA of $351 million (12.9% of sales) compared to $441 million (13.6% of sales) in the prior year quarter. Revenues declined 14% in North America and 18% internationally, primarily attributed to the separation of Atmus and lower demand in heavy-duty trucks.

The Accelera segment reported a sales increase of 7% to $110 million, with an EBITDA loss of $115 million. The revenue increase stemmed from increased electrolyzer installations. However, ongoing costs associated with the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery-electric vehicles, are contributing to EBITDA losses, Cummins stated.

Full-year guidance

Based on its current forecast, Cummins said it is maintaining its full-year 2024 revenue guidance to be in the range of down 3% to flat. EBITDA is expected to be approximately 15.5% – at the top end of the previous guidance of 15.0% to 15.5% – due to continued improvements in the Power Systems and Distribution segments.

“Although we faced slowing demand in the North American heavy-duty truck market during the third quarter and anticipate this trend to persist into the fourth quarter, Cummins remains well-positioned to deliver strong financial performance, invest in future growth and return cash to shareholders,” said Rumsey.