Cummins Q2 Profit Rises on Higher Generator, Engine Sales
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An increase in sales of power generators and heavy-duty truck engines boosted profits at Cummins Inc. in the second quarter of 2024, the company said Aug. 1.
Columbus, Ind.-based Cummins reported net income of $726 million in Q2, a 0.83% increase from $720 million in the same period in 2023.
The company’s second-quarter revenue of $8.796 billion increased 2% from $8.638 billion in the same quarter in 2023. Sales in North America increased 4% year on year, but international revenue decreased 2%, Cummins said, without providing further details.
“We achieved record quarterly sales and solid profitability in the second quarter, led by significant improvement in our Power Systems business,” CEO Jennifer Rumsey said in a statement accompanying the results.
Rumsey
Overall, Power Systems division sales totaled $1.589 billion, up 9.1% from $1.457 billion in the same period in 2023.
The unit’s revenue from power generator sales totaled $987 million in Q2, up 15.6% from $854 million a year earlier. Cummins sold 3,700 power generation units in the most recent quarter, up 12.1% from 3,300 in Q2 2023.
Sales at Cummins’ Engine division rose 5% year over year to $3.151 billion from $2.988 billion. The division’s heavy-duty truck engine sales revenue totaled $1.184 billion in Q2, up 6% from $1.117 billion in the year-ago period.
Cummins’ heavy-duty truck engine shipments totaled 37,500 in the most recent quarter, up 3% from 36,400 in the year-ago period and 11.6% compared with 33,600 in the first three months of 2024.
In North America, Cummins’ heavy-duty truck engine sales totaled 31,000, up 7% from a year ago, Rumsey said during the company’s quarterly earnings call, adding that the Jamestown Engine plant in New York produced more heavy-duty engines than ever before.
Meanwhile, sales at the company’s Components division fell 13% year on year to $2.982 billion from $3.425 billion, largely as a result of the spinoff of filtration business Atmus, which closed in March.
Analysts were impressed by the results.
Wertheimer
“Cummins’ results were a bit of fresh air in an overall pretty tepid [machinery sector] earnings season,” Melius Research founding partner Rob Wertheimer said.
“That’s a near-term and longer-term comment: In the short term, the company had a good outcome against what we thought might be a strengthening headwind in truck. We thought the quarter had some risk on potential cuts to truck production, but instead we saw a little upside near term,” Wertheimer said in an Aug. 1 research note.
“The longer term keeps firming up a little at a time as well. Cummins’ data center exposure is very well positioned, and the company is now taking orders into 2027 (with expanded capacity taking some time to ramp up, largely due to supplier capacity issues),” he said. “It’s still unclear to us how to back up data centers scaling into the multiple hundreds of megawatts (that’s a lot of diesels strung together), but it looks like the reliability and instant power delivery of diesels is part of the answer, at least, with nothing else easy to envision.”
As a result of the better-than-expected quarter, Cummins raised its full-year 2024 revenue guidance to down 3% to flat from down 2% to 5% because of stronger-than-expected demand across what it said were several markets, especially in the North America on-highway truck segment and power generation.
That said, Rumsey noted that “we still expect slowing demand in the North America heavy-duty truck market in the second half of the year.”
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