Cummins Q3 Profit Jumps 23.3% on Data Center Generator Needs

Cummins posted Q3 revenue of $8.456 billion. (Cummins Inc.)

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Buoyant appetite for data center power generators underpinned a 23.3% year-on-year jump in Cummins Inc.’s profit in the third quarter, trumping weak demand for heavy-duty truck engines in North America.

Columbus, Ind.-based Cummins posted a Q3 profit of $809 million or $5.86 per diluted share, compared with a net income total of $656 million, $4.59, in the same period in 2023.

The company’s Q3 revenue of $8.456 billion was little changed from $8.431 billion in the year-ago period.

“We achieved strong sales and profitability in the third quarter, led by improvement in our Power Systems and Distribution businesses,” said CEO Jennifer Rumsey.

Cummins Reports Strong Third Quarter 2024 Results

The results beat Wall Street expectations. Consensus analyst expectations were for EPS of $4.89 per share and $8.28 billion in revenue, according to Zacks Investment Research.

Cummins’ distribution unit posted sales of $2.952 billion in the most recent three-month period, up 16% from $2.535 billion a year earlier.

The unit’s revenue in North America increased 13% and international sales increased by 25% driven by increased demand for power generation products, particularly for data center applications, and increased pricing, Cummins said.

Revenue from power generation sales totaled $1.091 billion in Q3, a jump of 80% from $606 million in the year-ago period, the company said.

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Rumsey 

The Power Systems division reported sales of $1.687 billion in the three months that ended Sept. 30, up 17% from $1.444 billion in the year-ago period.

Power generation revenue increased 24% driven by increased global demand, particularly from the data center market, Cummins said. Industrial revenue, meanwhile, increased 7%, largely due to strong mining demand, more than offsetting weaker oil and gas markets.

However, earnings at what typically are the company’s two largest divisions fell on truck market weakness, plus the spinoff of filtration business Atmus and facility shutdowns due to Hurricane Helene.

Cummins’ components unit posted sales of $2.724 billion in the most recent quarter, down 16% from $3.236 billion a year earlier, absent $396 million in sales from Atmus.

Revenue at the unit in North America fell 14% and international sales decreased 18%, primarily as a result of the Atmus spinoff and reduced demand in heavy-duty truck markets.

Within the Components division, drivetrain and braking systems sales brought in $1.131 billion in Q3, down 3.9% compared with $1.177 billion in the year-ago period.

Production at Cummins’ drivetrain and braking facilities in western North Carolina was hampered by the impact of Helene late in the quarter, Chief Financial Officer Mark Smith told analysts during the company’s quarterly earnings call. Those facilities are running normally again, Rumsey added later in the call. Smith said Helene’s impact was in the “low tens of millions of dollars.”

At Cummins’ engine division, sales in Q3 totaled $2.913 billion, down 1% from $2.931 billion.

Revenue decreased 2% in North America and increased 4% in international markets due to softening demand in the North American heavy-duty truck market and strength in global medium-duty truck markets.

Heavy-duty truck engine sales in the most recent three-month period totaled $1.021 billion, down 8.5% from $1.116 billion in the same period a year earlier.

Cummins shipped 32,400 heavy-duty truck engines in Q3, down 10.7% compared with 36,300 in the year-ago period.

The company maintained its expectations for North American heavy-duty truck production of 255,000-275,000 vehicles, or down 7% to 12% year over year.

Rumsey told analysts Cummins saw a softening in the North American heavy-duty truck market in Q3 and expects this to continue in Q4.

The first half of 2025 will be “relatively soft” in the heavy-duty space, Smith said in the call, although Rumsey noted Cummins expects the Environmental Protection Agency emissions regulation pre-buy to begin in 2025.

Cummins’ medium-duty truck plus bus engine sales in Q3 totaled $1.073 billion, an increase of 13.2% compared with $931 million in the year-ago period.

Overall, the company is maintaining its full-year 2024 revenue guidance of down 3% to flat.

“We solidified our expectations on profitability for 2024 to the top end of our prior range thanks to continued improvements in Power Systems and Distribution segments,” said Rumsey. “Although we faced slowing demand in the North American heavy-duty truck market during the third quarter and anticipate this trend to persist into the fourth quarter, Cummins remains well-positioned to deliver strong financial performance, invest in future growth and return cash to shareholders.”