Cummins Inc. reported first-quarter 2024 earnings of $5.10 per share, a decrease from $5.55 per share in the same quarter of 2023. Despite missing the Zacks Consensus Estimate of $5.11 per share, the company’s revenues stood at $8.40 billion, slightly lower than $8.45 billion in the previous year. Notably, the top line surpassed the Zacks Consensus Estimate of $8.35 billion.
Engine Segment Performance
Sales in Cummins’ Engine segment dropped by 2% year over year to $2.9 billion, slightly exceeding the estimated $2.8 billion. The segment experienced a 1% increase in on-highway revenues driven by strong North American truck market demand. However, international sales faced an 8% decline due to reduced demand from Europe and China. The segment’s EBITDA decreased to $414 million from $457 million in the previous year but exceeded the estimated $390 million.
Distribution and Components Segments
In the Distribution segment, sales reached $2.5 billion, up by 5% year over year, matching the estimated figure. Strong demand for power generation products and effective pricing strategies led to revenue growth. North American sales increased by 2%, while international sales saw a 14% rise. However, the segment’s EBITDA fell to $294 million from $335 million in the prior year, missing the estimate of $323 million.
Sales in the Components segment totaled $3.3 billion, marking a 6% decline from the previous year. Despite matching forecasts, North American revenues dropped by 5% and international sales reduced by 8% due to lower demand in Europe and China. The segment’s EBITDA stood at $473 million, lower than the $507 million in the previous year, and below the estimated $489 million.
Power Systems and Accelera Segments
The Power Systems segment experienced a 3% sales growth to $1.4 billion but fell short of the estimated $1.42 billion. While power generation revenues surged by 11%, industrial revenues dropped by 8% due to weaker demand in oil and gas markets. The segment’s EBITDA increased to $237 million from $219 million, exceeding the estimated $231 million.
Sales in the Accelera segment totaled $93 million, up by 9% year over year but missed the estimate of $111.7 million. The segment incurred a pretax loss of $101 million, wider than the estimated $96.3 million, attributed to costs associated with developing electric powertrains, fuel cells, and products for battery electric vehicles.
Financial Overview and Future Projections
Cummins’ cash and cash equivalents stood at $2.54 billion as of March 31, 2024, up from $2.1 billion at the end of December 2023. The long-term debt increased to $5.7 billion from $4.8 billion as of December 31, 2023. Looking ahead to full-year 2024, Cummins anticipates a 2-5% decline in revenues and EBITDA ranging from 14.5-15.5% of sales. The company remains committed to returning nearly 50% of its operating cash flow to shareholders through dividends.
Cummins currently holds a Zacks Rank #3 (Hold).
Performance Comparison in the Auto Space
General Motors reported first-quarter 2024 adjusted earnings of $2.62 per share, surpassing the Zacks Consensus Estimate and recording an increase from the previous year. Revenues also exceeded expectations and saw growth from the year-ago period.
Similarly, Ford reported first-quarter 2024 adjusted earnings per share of 49 cents, beating the Zacks Consensus Estimate. However, the earnings declined from the prior-year quarter, but consolidated revenues showed a modest increase year over year.
PACCAR recorded earnings of $2.27 per share in the first quarter of 2024, surpassing estimates and showing growth compared to the previous year. The company’s consolidated revenues also saw an improvement year over year.