Cummins posted first quarter revenues of $5 billion, a 17-percent decline compared to the first quarter of 2019. Lower truck production in North America and weaker demand in global construction, mining, and power generation markets drove the majority of the revenue decrease. Currency negatively impacted revenues by 1 percent primarily because of a stronger dollar.
Sales in North America declined by 16 percent while international revenues decreased by 17 percent led by declines in Europe, Asia Pacific, Latin America, India, and China.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter were $846 million (16.9 percent of sales), compared to $1.0 billion (17.2 percent of sales) a year ago. First quarter EBITDA included a $37 million benefit to joint venture earnings resulting from recent changes to tax law in India.
Net income attributable to Cummins in the first quarter was $511 million ($3.41 per diluted share) compared to $663 million ($4.20 per diluted share) in 2019.
"We delivered strong profitability in the first quarter, supported by the commitment of our employees to serve our customers and the benefit of cost reduction actions we initiated in the second half of 2019,” said Cummins chairman and CEO Tom Linebarger. “Amidst the unprecedented COVID-19 pandemic, the health and safety of our employees and the communities in which we operate is our top priority. Our teams are working hard to support the global economy, leveraging our flexibility and strong supplier network to help our customers deliver essential products and support response efforts. Given the significant impact the pandemic will have on demand across our industry in the second quarter and beyond, we are continuing to take actions to reduce cost and boost our already strong liquidity.
"During our 100-year history, we have encountered several unforeseen crises, and I am confident we will successfully navigate this one as we have done before, to emerge stronger. Cummins enters this period of uncertainty in a position of strength with an experienced leadership team that has led through multiple cycles and a strong balance sheet. Our deep customer and supplier relationships combined with our leading positions in global markets leave us well positioned to deliver strong growth when the global economy recovers."
Cummins said it is not providing revenue or profitability guidance for 2020 because of uncertainty related to the coronavirus pandemic. It expects a significant impact to its second quarter results because of disruptions across customer and supplier operations and lower end market demand, and it expects weak demand levels for some time. Cummins recently announced cost reduction actions, including a temporary reduction in salaries, and is lowering targeted capex by more than 25 percent compared to 2019.
In the first quarter:
· Cummins Foundation Issued Grants to Community Partners Addressing Urgent Childcare, Nutrition and Remote Learning Needs Caused by COVID-19 Crisis.
· Announced partnerships with DuPont and 3M to provide critical material for N95 masks and Powered Air Purifying Respirators.
· The Human Rights Campaign (HRC) announced that Cummins received a perfect score for a 15th consecutive year in its Corporate Equality Index.
· Cummins was named to Ethisphere’s list of the World’s Most Ethical Companies for a 13th consecutive year.
Cummins’ engine segment posted sales of $2.2 billion, a 19-percent year-over-year plunge. Its EBITDA was $365 million, compared to $438 million a year ago. On-highway revenue slipped 17 percent and off-highway declined 23 percent on decreased global demand in the truck and construction markets.
Cummins’ distribution segment reported $1.8 billion in sales, down 9 percent. EBITDA was $158 million, down from $171 million a year ago. Revenues in North America declined 11 percent and international sales decreased 6 percent.
Cummins’ components segment posted $1.5 billion in sales, down 19 percent. Power generation segment sales were $884 million, an 18-percent year-over-year tumble. Power generation revenues dropped 8 percent, while industrial revenues decreased 30 percent.
Cummins Inc. is based in Columbus, Ind.
