Cummins Inc. posted $8.638 billion in net sales in the second quarter of 2023, compared to $6.586 billion in the second quarter of 2022, a 31.2-percent year-over-year increase. Sales in North America increased 31 percent and international revenues increased 32 percent because of the addition of Meritor and strong demand across most global markets.
Net income attributable to Cummins in the second quarter was $720 million, or $5.05 per diluted share compared to $702 million, or $4.94 per diluted share in 2022. Results included costs associated with the separation of Atmus of $23 million, or $0.13 per diluted share, in the second quarter of 2023, and $29 million, or $0.16 per diluted share, in the second quarter of 2022. The second quarter of 2022 also included $47 million, or $0.33 per diluted share, of benefit from adjusting the reserves related to the indefinite suspension of Cummins’ operations in Russia.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.3 billion, or 15.1 percent of sales, compared to $1.1 billion, or 16.0 percent of sales, a year ago.
“Strong demand across most of our key markets and regions resulted in record revenues and solid profitability for the company in the second quarter of 2023,” said Jennifer Rumsey, chair and CEO. “We are committed to delivering cycle-over-cycle improvement in financial performance, returning cash to our shareholders and prioritizing investments to continue building our product portfolio to power our customers’ success around the world. I want to thank our Cummins employees who continue to work tirelessly to meet customer needs and respond to the strong demand levels by ensuring quality products, strengthening our customer relationships, and navigating continued supply chain constraints.
“While we see demand remaining strong through 2023 and we are maintaining our guidance on revenue and profitability, we continue to closely monitor global economic indicators. Should economic momentum slow, Cummins will remain in a strong position to keep investing in future growth, bringing new technologies to customers as we advance our Destination Zero strategy, and returning cash to shareholders.”
On April 3rd, United States President Joe Biden visited company facilities in Fridley, Minn., to tour Accelera by Cummins’ first U.S. manufacturing location for electrolyzers, a key technology to produce low- and no-carbon hydrogen. The official ribbon cutting on May 19th marked the start of electrolyzer production in the United States. Accelera is initially dedicating 89,000 square feet of the existing Cummins power generation facility in Fridley to electrolyzer production.
In the second quarter, Accelera reached a milestone of backlog electrolyzer orders totaling more than $500 million. The Fridley facility will help address that growing demand along with other capacity being added globally.
Cummins signed a definitive agreement with Tata Motors Limited (TML), to manufacture a range of low- to zero-emissions technology products in India over the next few years. As a part of this agreement, Cummins and TML have set up a new business entity called TCPL Green Energy Solutions Private Limited (GES), a wholly owned subsidiary under the existing joint venture with a focus on the development and manufacturing of sustainable technology products that will include hydrogen-powered internal combustion engines, fuel delivery systems, and battery electric powertrains and fuel cell electric systems through the Accelera by Cummins brand.
All segments rising
In Cummins’ Components segment, sales totaled $3.4 billion, up 76 percent compared to the second quarter of 2022. Revenues in North America increased by 70 percent and international sales increased by 84 percent because of the addition of Meritor and increased global demand.
In Cummins’ Engines segment, sales increased 8 percent to $3 billion. On-highway revenues increased 7 percent, driven by strong demand in the North American truck market and pricing actions. Sales increased 7 percent in North America and 10 percent in international markets.
In its Distribution segment, Cummins jumped 15 percent to $2.6 billion. Revenues in North America increased 20 percent. Higher revenues were driven by increased demand for whole goods, especially power generation products. In the Power Systems segment, sales jumped 21 percent to $1.5 billion. Power generation revenues increased 30 percent driven by increased global demand.
In the Accelera segment, sales hiked $85 million, up 102 percent.
On April 3, 2023, Cummins acquired Teksid Hierro de Mexico, S.A. de C.V. (Teksid MX) business for approximately $150 million, subject to working capital and other customary adjustments. Teksid MX operates a cast iron foundry located in Monclova, Mexico, which primarily forges blocks and heads used in engines. Teksid Inc. facilitates the commercialization of Teksid MX products in North America.
For the first six months of 2023, net sales totaled $17.091 billion, compared to $12.971 billion in the first six months of 2022, a 31.8-percent increase.