Cummins Q1 Revenue Falls Short As International Demand Weakens: Details

Cummins Inc CMI reported a first-quarter 2024 slight sales decline of 0.6% year-over-year to $8.401 billion, missing the consensus of $8.449 billion.

The Columbus, Indiana-based company stated that sales in North America were flat YoY, and international revenues decreased by 1%, reflecting lower demand in China and Europe.

Adjusted EPS of $5.10 missed the consensus of $5.13.

The results included a net gain from the Atmus separation of $1.3 billion, or $9.08 per diluted share, after accounting for transaction costs and other expenses, and restructuring expenses of $29 million, or $0.15 per diluted share.

Sales by segments: Components $3.3 billion (-6% Y/Y), Engine $2.9 billion (-2% Y/Y), Distribution $2.5 billion (+5% Y/Y), Power Systems $1.4 billion (+3% Y/Y), and Accelera $93 million (+9% Y/Y).

Gross profit increased 0.6% Y/Y to $2.04 billion, and the margin expanded by 30 bps to 24.3%.

CMI reported an operating income of $923 million (-10% Y/Y), and the margin contracted by 115 bps to 10.9%.

Cummins’ operating cash flow for the quarter totaled $276 million, compared to $495 million a year ago. CMI held cash and equivalents of $2.54 billion as of March-end.

EBITDA as a percentage of net sales was 30.6% compared to 16.1% in the same quarter of 2023.

“We have raised our expectations on revenue and profitability for 2024 due to continued demand for Cummins’ products and services. We do still expect slowing demand in some of our key markets in the second half of the year,” commented Jennifer Rumsey, Chair and CEO.

2024 Outlook: Cummins projects revenues to decline 2%-5% on a year-over-year basis and EBITDA margin to be in the range of 14.5%-15.5% (prior 14.4%-15.4%).

Price Action: CMI shares are trading lower by 1.50% at $279.62 at the last check Thursday.

Photo via Wikimedia Commons