Latest news with #JenniferRumsey
Yahoo
20-05-2025
- Automotive
- Yahoo
CMI Q1 Earnings Call: Power Systems Outperformance and Uncertainty from Tariffs Shape Outlook
Engine manufacturer Cummins (NYSE:CMI) reported Q1 CY2025 results beating Wall Street's revenue expectations , but sales fell by 2.7% year on year to $8.17 billion. Its non-GAAP profit of $5.96 per share was 21% above analysts' consensus estimates. Is now the time to buy CMI? Find out in our full research report (it's free). Revenue: $8.17 billion vs analyst estimates of $8.13 billion (2.7% year-on-year decline, 0.6% beat) Adjusted EPS: $5.96 vs analyst estimates of $4.92 (21% beat) Adjusted EBITDA: $1.46 billion vs analyst estimates of $1.31 billion (17.9% margin, 11.2% beat) Operating Margin: 13.9%, up from 11% in the same quarter last year Free Cash Flow was -$165 million, down from $107 million in the same quarter last year Market Capitalization: $46.08 billion Cummins' first quarter results were shaped by robust performance in its Power Systems segment and strong aftermarket demand, even as core North American truck markets softened. CEO Jennifer Rumsey emphasized the launch of new engine platforms and the acquisition of hybrid retrofit technology as key factors in operational improvement. She noted, 'We achieved impressive results in the first quarter with record financial performance in our Power Systems business,' while cautioning about increasing uncertainty from trade tariffs and regulatory changes. Looking ahead, management withheld full-year guidance due to the evolving impact of tariffs and unclear regulatory timelines, particularly for emissions standards in North America. Rumsey described the environment as highly uncertain, stating, 'The breadth and changing nature of the tariffs have introduced a great degree of uncertainty and mean that at this time, we are unable to predict with confidence our expected performance for the year.' The company is closely monitoring demand trends across segments, with particular focus on aftermarket strength and the timing of new product introductions. Management attributed the quarter's profitability to a combination of operational improvements, segment-specific momentum, and proactive pricing, while also flagging near-term risks from trade policy and regulatory uncertainty. Power Systems Margin Expansion: Operational enhancements and broad-based demand—especially in data centers, mining, and rebuilds—drove record profitability, with aftermarket sales exceeding expectations. Aftermarket and Pricing Gains: Aftermarket volumes increased across several segments, supported by successful price increases and cost control, notably within the engine and distribution businesses. Data Center Demand: Accelerating demand for data center backup power in both the U.S. and China contributed to growth, but management clarified that aftermarket strength was broad-based and not solely tied to this market. Product Launches and Acquisitions: The introduction of the X10 and B7.2 engine platforms and the acquisition of First Mode's retrofit hybrid technology for mining/rail reinforced Cummins' focus on decarbonization and product renewal. Tariff and Regulatory Complexities: Management highlighted that tariffs had minimal impact in Q1 but expect growing effects in future quarters, particularly as inventory and supply chain mitigation options diminish. They also noted ongoing uncertainty around 2027 emissions regulations and the potential for additional tariffs under Section 232 investigations. Management's outlook is shaped by the potential duration and scope of tariffs, regulatory changes, and mixed demand signals across end markets, all of which introduce significant unpredictability for the remainder of the year. Tariff Uncertainty: The evolving landscape of U.S. and international tariffs is expected to impact both costs and demand, with management planning to pass on costs where possible but acknowledging some lag and risk to overall economic activity. Regulatory Timeline: Pending emissions regulations in North America create uncertainty for new product adoption and customer purchasing decisions, with the 2027 NOx rule and potential changes to greenhouse gas standards being closely monitored. Aftermarket and Power Systems Resilience: Management views the Power Systems and aftermarket segments as having more predictable multi-year demand, with the ability to reallocate orders if needed, while on-highway engine and components businesses remain exposed to cyclical swings. Jamie Cook (Truist Securities): Asked about the quantifiable impact of tariffs and visibility by segment; management declined to provide specifics, citing ongoing uncertainty and noted actions to mitigate and pass on costs. Jerry Revich (Goldman Sachs): Inquired if Power Systems margins are sustainable and about regulatory impacts on engine platforms; management said margins reflect underlying improvements but may fluctuate with demand and regulatory clarity. Angel Castillo (Morgan Stanley): Sought detail on near-term tariff effects and aftermarket drivers; management stated tariff impacts were immaterial in Q1 but will grow, and aftermarket strength is broad-based, not just data center-driven. Tim Thein (Raymond James): Probed on expectations for parts demand and joint venture income; management expects parts demand to remain resilient but noted joint venture income could be lumpy and may moderate. David Raso (Evercore ISI): Questioned whether demand concerns stem from actual price pushback or general macro uncertainty; management attributed order caution to broader economic and regulatory uncertainties rather than direct price resistance. In the coming quarters, the StockStory team will be tracking (1) the impact of newly enacted and potential tariffs on both costs and order volumes as mitigation strategies phase out, (2) the pace and outcome of regulatory developments around 2027 emissions standards and Section 232 investigations, and (3) sustained strength in Power Systems and aftermarket demand, including the adoption of new engine platforms and decarbonization technologies. Execution on these fronts will be critical for assessing Cummins' resilience in a volatile environment. Cummins currently trades at a forward EV-to-EBITDA ratio of 11.5×. At this valuation, is it a buy or sell post earnings? See for yourself in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
Business Standard
06-05-2025
- Business
- Business Standard
Cummins India drops as parent withdraws guidance amid tariff concerns
Cummins India declined 5.22% to Rs 2,787.15 after its U.S.-based parent, Cummins Inc., withdrew its full-year guidance, citing uncertainty arising from potential trade tariffs introduced by the Trump administration. In a statement on Monday, Cummins Inc. announced it would not be providing an outlook for revenue or profitability for the remainder of the year due to the evolving economic landscape. The company had previously forecasted full-year revenue for 2025 to range between a 2% decline and a 3% increase over 2024. "While the outlook for the remainder of the year remains unclear, we remain confident in our position and that our Destination Zero strategy is the right one," said Jennifer Rumsey, Chair and CEO. "Cummins is in a strong position to navigate through economic uncertainty, and we look forward to reinstating our forecast when conditions allow." In the first quarter of 2025, Cummins reported revenue of $8.2 billion, down 3% year-on-year. Net income attributable to the company was $824 million, or $5.96 per diluted share, compared to $2.0 billion, or $14.03 per share, in Q1 2024. Last years results were boosted by a one-time gain from the spin-off of its filtration business, now a separate entity named Atmus. Cummins India is a leading manufacturer of diesel and natural gas engines. The company is engaged in the business of manufacturing, trading, and selling engines and allied activities. The company's board will consider Q4FY25 results on 28 May 2025. On a consolidated basis, net profit of Cummins India rose 11.94% to Rs 558.46 crore while net sales rose 21.61% to Rs 3052.15 crore in Q3 December 2024 over Q3 December 2023.
Business Wire
05-05-2025
- Business
- Business Wire
Cummins Reports First Quarter 2025 Results
COLUMBUS, Ind.--(BUSINESS WIRE)--Cummins Inc. (NYSE: CMI) today reported results for the first quarter of 2025. 'The company delivered strong financial results in the first quarter of 2025 led by record performance in our Power Systems Segment,' said Jennifer Rumsey, Chair and CEO. 'I want to thank our global employees for their commitment to delivering for our customers in an increasingly challenging environment. Due to growing economic uncertainty driven by tariffs we have withdrawn our full year forecast.' First quarter revenues of $8.2 billion decreased 3% from the same quarter in 2024. Sales in North America decreased 1%, and international revenues decreased 5% due to lower demand in Latin America and Asia Pacific, partially offset by higher sales in China. Net income attributable to Cummins in the first quarter was $824 million, or $5.96 per diluted share, compared to $2.0 billion, or $14.03 per diluted share, in 2024. The first quarter of 2024 included the gain related to the separation of Atmus, net of transaction costs and other expenses, of $1.3 billion, or $9.08 per diluted share, and restructuring expenses of $29 million, or $0.15 per diluted share. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter were $1.5 billion, or 17.9% of sales, compared to $2.6 billion, or 30.6% of sales, a year ago. EBITDA for the first quarter of 2024 included the gain and costs noted above. 2025 Outlook: Due to growing economic uncertainty, the company is not providing an outlook for revenue or profitability for the remainder of 2025. 'While the outlook for the remainder of the year remains unclear, we remain confident in our position and that our Destination Zero strategy is the right one,' said Rumsey. 'Cummins is in a strong position to navigate through economic uncertainty, and we look forward to reinstating our forecast when conditions allow.' First Quarter 2025 Highlights: Cummins introduced the much-anticipated X10 as part of our Cummins HELM™ platforms. This engine replaces both the L9 and X12 engine platforms to deliver a new level of performance, durability and efficiency for heavy and medium-duty customers. Alongside the X15 and B Series, the X10 provides customers with a power solution to meet their unique operational requirements while maintaining the performance and reliability for which Cummins is known. Cummins also unveiled the new Cummins B7.2 diesel engine that brings the latest technology and advancements to one of our most proven platforms. The new engine will feature a slightly higher displacement and is designed to be a global platform which creates flexibility for different applications and duty cycles. Both the B7.2 and X10 engines will be manufactured at Rocky Mount Engine Plant in North Carolina and will go into production in North America in 2027. In February, Cummins announced the acquisition of assets of First Mode, a leader in retrofit hybrid solutions for mining and rail operations. The acquisition included hybrid mining and rail product lines, and the full technology portfolio which includes hydrogen and battery powertrain solutions. This technology represents the first commercially available retrofit hybrid system for mining equipment, significantly reducing total cost of ownership (TCO) while advancing decarbonization in operations. Accelera™ by Cummins announced the supply of a 100-megawatt proton exchange membrane (PEM) electrolyzer system for bp's Lingen green hydrogen project in Germany. The hydrogen-generation system will be the largest electrolyzer system assembled by Accelera to date and will be manufactured in Accelera's new electrolyzer plant in Spain. Once fully commissioned in 2027, the 100 MW electrolyzer system will produce up to 11,000 tons of green hydrogen per year. 1 Generally Accepted Accounting Principles in the U.S. First quarter 2025 detail (all comparisons to same period in 2024): Engine Segment Sales - $2.8 billion, down 5% Segment EBITDA - $458 million, or 16.5% of sales, compared to $414 million, or 14.1% of sales Revenues decreased 4% in North America and 11% in international markets due to lower on-highway demand in the United States and Latin America. Components Segment Sales - $2.7 billion, down 20% Segment EBITDA - $382 million, or 14.3% of sales, compared to $473 million, or 14.2% of sales, which includes $21 million of costs related to the separation of Atmus Revenues in North America decreased by 20% and international sales decreased by 20% primarily due to the separation of Atmus and lower on-highway demand in the United States and Europe. Distribution Segment Sales - $2.9 billion, up 15% Segment EBITDA - $376 million, or 12.9% of sales, compared to $294 million, or 11.6% of sales Revenues in North America increased 22% and international sales decreased by 1% primarily due to increased demand for power generation products in North America and favorable pricing. Power Systems Segment Sales - $1.6 billion, up 19% Segment EBITDA - $389 million, or 23.6% of sales, compared to $237 million, or 17.1% of sales Revenues in North America increased 15% and international sales increased 22% driven primarily by increased power generation demand, particularly for the data center market. Accelera Segment Sales - $103 million, up 11% Segment EBITDA loss - $86 million Revenues improved due to increased eMobility demand and electrolyzer installations. The company remains committed to pacing and focusing our zero emissions investments on the most promising paths in order to ensure we are set up for long-term success as part of our Destination Zero strategy. These continued investments contributed to the EBITDA losses. About Cummins Inc. Cummins Inc., a global power solutions leader, is comprised of five business segments – Engine, Components, Distribution, Power Systems and Accelera by Cummins – supported by our global manufacturing and extensive service and support network, skilled workforce and vast technological expertise. Cummins is committed to its Destination Zero strategy, which is grounded in the company's commitment to sustainability and helping its customers successfully navigate the energy transition with its broad portfolio of products. The products range from advanced diesel, natural gas, electric and hybrid powertrains and powertrain-related components including, aftertreatment, turbochargers, fuel systems, valvetrain technologies, controls systems, air handling systems, automated transmissions, axles, drivelines, brakes, suspension systems, electric power generation systems, electrified power systems with innovative components and subsystems, including battery, fuel cell and electric power technologies and hydrogen production technologies. Headquartered in Columbus, Indiana (U.S.), since its founding in 1919, Cummins employs approximately 69,600 people committed to powering a more prosperous world through three global corporate responsibility priorities critical to healthy communities: education, environment, and equality of opportunity. Cummins serves its customers online, through a network of company-owned and independent distributor locations, and through thousands of dealer locations worldwide and earned about $3.9 billion on sales of $34.1 billion in 2024. See how Cummins is powering a world that's always on by accessing news releases and more information at Forward-looking disclosure statement Information provided in this release that is not purely historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our forecasts, guidance, preliminary results, expectations, hopes, beliefs and intentions on strategies regarding the future. These forward-looking statements include, without limitation, statements relating to our plans and expectations for our revenues and EBITDA. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including, but not limited to: any adverse consequences resulting from entering into the Settlement Agreements, including required additional mitigation projects, adverse reputational impacts and potential resulting legal actions; increased scrutiny from regulatory agencies, as well as unpredictability in the adoption, implementation and enforcement of emission standards around the world; evolving environmental and climate change legislation and regulatory initiatives; changes in international, national and regional trade laws, regulations and policies; changes in taxation; global legal and ethical compliance costs and risks; future bans or limitations on the use of diesel-powered products; raw material, transportation and labor price fluctuations and supply shortages; aligning our capacity and production with our demand; the actions of, and income from, joint ventures and other investees that we do not directly control; large truck manufacturers' and original equipment manufacturers' customers discontinuing outsourcing their engine supply needs or experiencing financial distress, or change in control; product recalls; variability in material and commodity costs; the development of new technologies that reduce demand for our current products and services; lower than expected acceptance of new or existing products or services; product liability claims; our sales mix of products; climate change, global warming, more stringent climate change regulations, accords, mitigation efforts, greenhouse gas regulations or other legislation designed to address climate change; our plan to reposition our portfolio of product offerings through exploration of strategic acquisitions, divestitures or exiting the production of certain product lines or product categories and related uncertainties of such decisions; increasing interest rates; challenging markets for talent and ability to attract, develop and retain key personnel; exposure to potential security breaches or other disruptions to our information technology (IT) environment and data security; the use of artificial intelligence in our business and in our products and challenges with properly managing its use; political, economic and other risks from operations in numerous countries including political, economic and social uncertainty and the evolving globalization of our business; competitor activity; increasing competition, including increased global competition among our customers in emerging markets; failure to meet sustainability expectations or standards, or achieve our sustainability goals; labor relations or work stoppages; foreign currency exchange rate changes; the performance of our pension plan assets and volatility of discount rates; the price and availability of energy; continued availability of financing, financial instruments and financial resources in the amounts, at the times and on the terms required to support our future business; and other risks detailed from time to time in our SEC filings, including particularly in the Risk Factors section of our 2024 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this release and we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available at or at in the Investor Relations section of our website. Presentation of Non-GAAP Financial Information EBITDA is a non-GAAP measure used in this release and is defined and reconciled to what management believes to be the most comparable GAAP measure in a schedule attached to this release, except for forward-looking measures of EBITDA where a reconciliation to the corresponding GAAP measures is not available due to the variability, complexity and limited visibility of the non-cash items that are excluded from the non-GAAP outlook measure. Cummins presents this information as it believes it is useful to understanding the Company's operating performance, and because EBITDA is a measure used internally to assess the performance of the operating units. Webcast information Cummins management will host a teleconference to discuss these results today at 10 a.m. EDT. This teleconference will be webcast and available on the Investor Relations section of the Cummins website at Participants wishing to view the visuals available with the audio are encouraged to sign-in a few minutes prior to the start of the teleconference. CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (a) In millions, except par value March 31, 2025 December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 1,532 $ 1,671 Marketable securities 626 593 Total cash, cash equivalents and marketable securities 2,158 2,264 Accounts and notes receivable, net 5,680 5,181 Inventories 6,123 5,742 Prepaid expenses and other current assets 1,579 1,565 Total current assets 15,540 14,752 Long-term assets Property, plant and equipment, net 6,407 6,356 Investments and advances related to equity method investees 1,990 1,889 Goodwill 2,397 2,370 Other intangible assets, net 2,401 2,351 Pension assets 1,150 1,189 Other assets 2,646 2,633 Total assets $ 32,531 $ 31,540 LIABILITIES Current liabilities Accounts payable (principally trade) $ 4,311 $ 3,951 Loans payable 291 356 Commercial paper 1,740 1,259 Current maturities of long-term debt 661 660 Accrued compensation, benefits and retirement costs 523 1,084 Current portion of accrued product warranty 685 679 Current portion of deferred revenue 1,506 1,347 Other accrued expenses 1,858 1,898 Total current liabilities 11,575 11,234 Long-term liabilities Long-term debt 4,796 4,784 Deferred revenue 1,053 1,065 Other liabilities 3,136 3,149 Total liabilities $ 20,560 $ 20,232 EQUITY Cummins Inc. shareholders' equity Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued $ 2,600 $ 2,636 Retained earnings 21,401 20,828 Treasury stock, at cost, 84.8 and 85.1 shares (10,711 ) (10,748 ) Accumulated other comprehensive loss (2,366 ) (2,445 ) Total Cummins Inc. shareholders' equity 10,924 10,271 Noncontrolling interests 1,047 1,037 Total equity $ 11,971 $ 11,308 Total liabilities and equity $ 32,531 $ 31,540 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. Expand CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (a) Three months ended March 31, In millions 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 850 $ 2,028 Adjustments to reconcile consolidated net income to net cash (used in) provided by operating activities Gain related to divestiture of Atmus — (1,333 ) Depreciation and amortization 269 265 Deferred income taxes (25 ) (38 ) Equity in income of investees, net of dividends (70 ) (78 ) Pension and OPEB expense 19 9 Pension contributions and OPEB payments (13 ) (48 ) Changes in current assets and liabilities, net of acquisitions and divestiture Accounts and notes receivable (457 ) (11 ) Inventories (331 ) (354 ) Other current assets (36 ) (175 ) Accounts payable 330 327 Accrued expenses (487 ) (393 ) Other, net (52 ) 77 Net cash (used in) provided by operating activities (3 ) 276 CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (162 ) (169 ) Investments in and net advances to equity investees (60 ) (3 ) Acquisition of businesses, net of cash acquired (12 ) (59 ) Investments in marketable securities—acquisitions (457 ) (379 ) Investments in marketable securities—liquidations 432 431 Cash associated with Atmus divestiture — (174 ) Other, net 13 (53 ) Net cash used in investing activities (246 ) (406 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 52 2,398 Net borrowings (payments) of commercial paper 481 (887 ) Payments on borrowings and finance lease obligations (144 ) (748 ) Dividend payments on common stock (251 ) (239 ) Other, net (46 ) (25 ) Net cash provided by financing activities 92 499 18 (7 ) Net (decrease) increase in cash and cash equivalents (139 ) 362 Cash and cash equivalents at beginning of year 1,671 2,179 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,532 $ 2,541 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. Expand CUMMINS INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) In millions Engine Components Distribution Power Systems Accelera Total Segments Intersegment Eliminations (1) Total Three months ended March 31, 2025 External sales $ 2,040 $ 2,270 $ 2,902 $ 872 $ 90 $ 8,174 $ — $ 8,174 Intersegment sales 731 400 5 777 13 1,926 (1,926 ) — Total sales 2,771 2,670 2,907 1,649 103 10,100 (1,926 ) 8,174 Research, development and engineering expenses 155 75 14 57 43 344 — 344 Equity, royalty and interest income (loss) from investees 73 7 28 29 (6 ) 131 — 131 Interest income 10 7 5 4 — 26 — 26 EBITDA (2) 458 382 376 389 (86 ) 1,519 (59 ) 1,460 Depreciation and amortization (3) 67 122 32 33 12 266 — 266 EBITDA as a percentage of total sales 16.5 % 14.3 % 12.9 % 23.6 % NM 15.0 % 17.9 % Three months ended March 31, 2024 External sales $ 2,240 $ 2,842 $ 2,529 $ 708 $ 84 $ 8,403 $ — $ 8,403 Intersegment sales 688 490 6 681 9 1,874 (1,874 ) — Total sales 2,928 3,332 2,535 1,389 93 10,277 (1,874 ) 8,403 Research, development and engineering expenses 154 84 14 60 55 367 2 369 Equity, royalty and interest income (loss) from investees 57 26 24 19 (3 ) 123 — 123 Interest income 7 8 11 3 — 29 — 29 EBITDA (2) 414 473 (4 ) 294 237 (101 ) 1,317 1,255 2,572 Depreciation and amortization (3) 58 125 31 34 14 262 — 262 EBITDA as a percentage of total sales 14.1 % 14.2 % 11.6 % 17.1 % NM 12.8 % 30.6 % (1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended March 31, 2025. The three months ended March 31, 2024, included a $1.3 billion gain related to the divestiture of Atmus and $14 million of costs associated with the divestiture of Atmus. (2) EBITDA is defined as earnings or losses before interest expense, income taxes, depreciation and amortization and noncontrolling interests. We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. (3) Depreciation and amortization, as shown on a segment basis, excluded the amortization of debt discount and deferred costs included in the Condensed Consolidated Statements of Net Income as interest expense. The amortization of debt discount and deferred costs was $3 million and $3 million for the three months ended March 31, 2025 and 2024, respectively. A portion of depreciation expense is included in research, development and engineering expenses. (4) Included $21 million of costs associated with the divestiture of Atmus for the three months ended March 31, 2024. Expand CUMMINS INC. AND SUBSIDIARIES SELECT FOOTNOTE DATA (Unaudited) Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Net Income for the reporting periods was as follows: INCOME TAXES Our effective tax rate for 2025, excluding discrete items, is expected to approximate 24.5 percent. Our effective tax rates for the three months ended March 31, 2025 and 2024, were 23.9 percent and 8.7 percent, respectively. The three months ended March 31, 2025, contained net favorable discrete tax items of $7 million, or $0.05 per diluted share, primarily due to $8 million of favorable share-based compensation tax benefits, partially offset by $1 million of other unfavorable tax items. The three months ended March 31, 2024, contained favorable discrete tax items primarily due to the $1.3 billion non-taxable gain on the Atmus split-off. Other discrete tax items were $21 million favorable primarily due to adjustments related to audit settlements. CUMMINS INC. AND SUBSIDIARIES FINANCIAL MEASURES THAT SUPPLEMENT GAAP (Unaudited) Reconciliation of Non GAAP measures - Earnings before interest, income taxes, depreciation and amortization and noncontrolling interests (EBITDA) We believe EBITDA is a useful measure of our operating performance as it assists investors and debt holders in comparing our performance on a consistent basis without regard to financing methods, capital structure, income taxes or depreciation and amortization methods, which can vary significantly depending upon many factors. We believe EBITDA excluding special items is a useful measure of our operating performance without regard to the impact of the gain recognized and the related costs for the divestiture of Atmus and restructuring actions. This statement excludes forward looking measures of EBITDA where a reconciliation to the corresponding accounting principles generally accepted in the United States (GAAP) measures is not available due to the variability, complexity and limited visibility of non-cash items that are excluded from the non-GAAP outlook measure. EBITDA is not in accordance with, or an alternative for, GAAP and may not be consistent with measures used by other companies. It should be considered supplemental data; however, the amounts included in the EBITDA calculation are derived from amounts included in the Condensed Consolidated Statements of Net Income. Below is a reconciliation of net income attributable to Cummins Inc. to EBITDA for each of the applicable periods: CUMMINS INC. AND SUBSIDIARIES SEGMENT SALES DATA (Unaudited) Engine Segment Sales by Market and Unit Shipments by Engine Classification Sales for our Engine segment by market were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Heavy-duty truck $ 921 $ — $ — $ — $ 921 Medium-duty truck and bus 986 — — — 986 Light-duty automotive 421 — — — 421 Off-highway 443 — — — 443 Total sales $ 2,771 $ — $ — $ — $ 2,771 2024 In millions Q1 Q2 Q3 Q4 YTD Heavy-duty truck $ 1,059 $ 1,184 $ 1,021 $ 980 $ 4,244 Medium-duty truck and bus 995 1,074 1,073 1,024 4,166 Light-duty automotive 438 461 395 301 1,595 Off-highway 436 432 424 415 1,707 Total sales $ 2,928 $ 3,151 $ 2,913 $ 2,720 $ 11,712 Expand Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows: Components Segment Sales by Business Sales for our Components segment by business were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Drivetrain and braking systems $ 1,056 $ — $ — $ — $ 1,056 Emission solutions 902 — — — 902 Components and software 595 — — — 595 Automated transmissions 117 — — — 117 Total sales $ 2,670 $ — $ — $ — $ 2,670 2024 In millions Q1 Q2 Q3 Q4 YTD Drivetrain and braking systems $ 1,232 $ 1,256 $ 1,131 $ 1,114 $ 4,733 Emission solutions 971 941 864 825 3,601 Components and software 611 623 581 589 2,404 Automated transmissions 165 162 148 113 588 Atmus (1) 353 — — — 353 (1) Included sales through the March 18, 2024, divestiture. Expand Distribution Segment Sales by Product Line Sales for our Distribution segment by product line were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 1,090 $ — $ — $ — $ 1,090 Parts 1,031 — — — 1,031 Service 416 — — — 416 Engines 370 — — — 370 Total sales $ 2,907 $ — $ — $ — $ 2,907 2024 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 707 $ 954 $ 1,091 $ 1,220 $ 3,972 Parts 1,001 990 1,004 985 3,980 Service 406 448 455 444 1,753 Engines 421 437 402 419 1,679 Total sales $ 2,535 $ 2,829 $ 2,952 $ 3,068 $ 11,384 Expand Power Systems Segment Sales by Product Line and Unit Shipments by Engine Classification Sales for our Power Systems segment by product line were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 1,001 $ — $ — $ — $ 1,001 Industrial 498 — — — 498 Generator technologies 150 — — — 150 Total sales $ 1,649 $ — $ — $ — $ 1,649 2024 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 853 $ 987 $ 1,055 $ 1,090 $ 3,985 Industrial 420 478 508 526 1,932 Generator technologies 116 124 124 127 491 Total sales $ 1,389 $ 1,589 $ 1,687 $ 1,743 $ 6,408 Expand High-horsepower unit shipments by engine classification were as follows:
Yahoo
13-03-2025
- Automotive
- Yahoo
ACT Expo 2025 Speakers Set to Prepare Fleets for the Road Ahead amid Technology and Industry Evolution
ACT Expo 2025 is coming April 28th, 2025 to Anaheim, California SANTA MONICA, Calif., March 13, 2025 (GLOBE NEWSWIRE) -- Organizers of the Advanced Clean Transportation (ACT) Expo, the largest advanced commercial vehicle technology event in North America, today announced the updated roster of confirmed speakers for the 15th annual fleet-focused event. Set to take place April 28 to May 1, 2025, at the Anaheim Convention Center, ACT Expo continues to serve as the leading annual meeting place for fleets and transportation industry stakeholders to access real-world strategies, new technologies, and insights that drive fleet efficiency, cost reduction, and competitive advantage in a rapidly evolving market. Throughout the four-day event, more speakers than ever – nearly 300 fleet executives and industry innovators -- will share case studies, strategies, and insights into the biggest operating challenges and competitive opportunities in the commercial transportation space. Sessions will focus on practical solutions for reducing total cost of ownership (TCO), leveraging emerging technologies like connected and automated vehicles, optimizing fleet operations, evaluating the current landscape of ZEV adoption, gaseous and renewable fuels, and strategies for a shifting U.S. regulatory environment. New this year, ACT Expo is introducing the Expo Hall Theater, where expert speakers and industry leaders will present on a wide variety of topics, providing extra value for attendees selecting Expo Hall Only registration. 'Fleets are facing an unprecedented amount of change, with an ever-expanding set of technologies and fuels to choose from, increased vehicle complexity, uncertain operating costs, evolving regulations, and growing customer demand for lower cost and cleaner solutions,' said Erik Neandross, President of Clean Transportation Solutions at TRC, the producers of ACT Expo. 'ACT Expo 2025 will provide fleet operators with the knowledge, strategies, and practical tools they need to stay competitive, adapt to industry shifts, and gain a clear understanding of which technologies are delivering real-world results.' Keynote Speakers Announced ACT Expo is proud to announce the first round of keynote speakers, who will share their expertise on the technologies and strategies reshaping the future of fleet transportation. Joining the roster of ACT Expo keynote speakers are: Jennifer Rumsey, Chair and Chief Executive Officer, Cummins, Inc. Mathias Carlbaum, President and Chief Executive Officer, International Catharina Modahl Nilsson, Member of the Executive Board of TRATON SE, Group Product Management, TRATON Patti Poppe, Chief Executive Officer, PG&E Corporation Lars Stenqvist, Chief Technology Officer, Volvo Group Jim Walenczak, Vice President, PACCAR Inc and General Manager, Kenworth Truck Company Full Roster of Industry Leaders Driving Fleet Success In addition to keynote speakers, nearly 300 industry expert speakers representing progressive fleet operators, commercial vehicle manufacturers, suppliers, infrastructure providers, and clean fuel companies will share their expertise during the four-day conference. While speakers are being added daily, notable confirmed leaders include: Sid Brown, Chief Executive Officer, NFI Sarah Burke, Chief Executive Officer, Martin Brower Jonathan Randall, President, Mack Trucks North America Debi Boffa, Chief Executive Officer, Travel Centers of America Sherry Sanger, Executive Vice President, Strategy and Marketing, Penske Transportation Solutions Adam Newsome, Chief Executive Officer, Lazer Logistics Ari Silkey, General Manager, Amazon Freight Jim Gillis, Pacific Region President, IMC Logistics John Kenning, Chief Executive Officer and President, First Student Ben Schill, Chief Corporate Development Officer, Paper Transport, LLC. Nicole McDonald, Senior Project Leader, Autonomous, J.B. Hunt Stacey Orlandi, President of Chevron Renewable Energy Group, Chevron Rakesh Aneja, Vice President and Chief of eMobility, Daimler Truck North America John Rich, Chief Technology Officer, PACCAR Dan Priestley, Senior Manager, Semi Truck Engineering, Tesla Christopher Reynolds, Executive Vice President and Chief Strategy Officer, Toyota Motor North America John Harris, Co-Founder and Chief Executive Officer, Harbinger Michael Halbherr, Chief Executive Officer, ABB E-Mobility Wen Han, Founder, Chairman and Chief Executive Officer, Windrose Technology Kate Jostworth, Head of First Mile USA, Maersk Olivia Hu, Head of Autonomous Trucking, Uber Freight Irene Espinola Campos, Global Head of Net Zero Carbon, Grupo Bimbo Allan Swan, President, Panasonic Energy of North America Sujay Sharma, Chief Executive Officer, bp pulse Americas John E. Pool, Chief Operating Officer, Mail Management Services, Inc. Efon Epanty, Chief, Transit Planning and Innovation, Prince George's County Department of Public Works & Transportation The full list of ACT Expo speakers can be viewed at The Industry's Premier Annual Meeting Place Since its inception in 2011, ACT Expo has offered fleet managers an unmatched opportunity to connect with sponsors and exhibitors providing solutions across the commercial transportation ecosystem. Attendees can explore best practices for deploying advanced clean vehicles of all weight classes and fuel types—battery-electric, hydrogen fuel cell, propane, natural gas, and more—along with autonomous, connected technologies, and renewable fuels. The massive expo hall will highlight more than 500 exhibitors and sponsors showcasing the latest clean transportation technologies, vehicles, and solutions designed to help fleets reduce costs, improve performance, and stay ahead of the competition. The 2025 event will double the exhibit space of previous Anaheim events, accommodating an increasing number of exhibitors and the latest fleet technologies. Supported by presenting sponsors Daimler Truck North America, Penske Transportation Solutions, and Chevron, ACT Expo attracts more than 12,000 registered attendees. For more information, and to register, visit About the Advanced Clean Transportation (ACT) Expo ACT Expo is North America's largest conference and expo showcasing solutions that drive economic and operational fleet sustainability. Now in its 15th year, ACT Expo will take place April 28-May 1, 2025, at the Anaheim Convention Center and is expected to attract over 12,000 attendees. The event provides fleet operators and stakeholders with unparalleled access to the latest technologies and strategies in clean transportation, including battery-electric, hydrogen fuel cell, propane, and natural gas vehicles, along with autonomous and connected technologies, renewable fuels, and more. The annual event is produced by TRC, as part of its Clean Transportation Solutions focus on market development for low- and zero-emission transportation technologies, infrastructure, and ultra-low carbon fuels for commercial transportation. Learn more at and Attachment ACT Expo 2025 is coming April 28th, 2025 to Anaheim, California CONTACT: Lawren Markle Advanced Clean Transportation (ACT) Expo 424-224-5364 Lmarkle@ in to access your portfolio
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05-02-2025
- Business
- Yahoo
Q4 2024 Cummins Inc Earnings Call
Christopher Clulow; Vice President - Investor Relations; Cummins Inc Jennifer Rumsey; Chairman of the Board, President, Chief Executive Officer; Cummins Inc Mark Smith; Chief Financial Officer, Vice President; Cummins Inc Angel Castillo; Analyst; Morgan Stanley & Co. LLC Stephen Volkmann; Analyst; Jefferies Jerry Revich; Analyst; Goldman Sachs & Company, Inc. Tim Thein; Analyst; Raymond James Kyle Menges; Analyst; Citi Jamie Cook; Analyst; Truist Securities David Raso; Analyst; Evercore ISI Avi Jaroslawicz; Analyst; UBS Rob Wertheimer; Analyst; Melius Research LLC Tami Zakaria; Analyst; JPMorgan Operator Greetings, and welcome to the Cummins Inc., Q4 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. Joining us today are Chair and CEO, Jennifer Rumsey; Vice President and CFO, Mark Smith; and Chris Clulow, Vice President, Investor Relations. It's now my pleasure to introduce your host, Chris Clulow. Please go ahead, sir. Christopher Clulow Thank you, Kevin. Good morning, everyone, and welcome to our teleconference today to discuss Cummins' results for the fourth quarter and full year of 2024. Participating with me today are Jennifer Rumsey, our Chair and Chief Executive Officer; and Mark Smith, our Chief Financial Officer. We will all be available to answer questions at the end of the teleconference. Before we start, please note that some of the information that you will hear or be given today will consist of forward-looking statements within the meaning of the Securities and Exchange Act of 1934. Such statements express our forecasts, expectations, hopes, beliefs and intentions on strategies regarding the future. Our actual future results could differ materially from those projected in such forward-looking statements because of a number of risks and uncertainties. More information regarding such risks and uncertainties is available in the forward-looking disclosure statement in the slide deck and our filings with the Securities and Exchange Commission, particularly the Risk Factors section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During the course of this call, we will be discussing certain non-GAAP financial measures, and we will refer you to our website for the reconciliation of those measures to GAAP financial measures. Our press release with a copy of the financial statements and a copy of today's webcast presentation are available on our website within the Investor Relations section at With that out of the way, I'll turn you over to our Chair and CEO, Jennifer Rumsey, to start us off. Jennifer Rumsey Thank you, Chris. Good morning. I'll start with a summary of 2024, discuss our fourth quarter and full year results and finish with a discussion of our outlook for 2025. Mark will then take you through more details of our fourth quarter and full year financial performance and our forecast for this year. As I reflect back on 2024, I am pleased to share that we delivered strong financial results with records in several parts of the business while also making significant progress in the execution of our Destination Zero strategy. I am incredibly proud of what Cummins and our employees accomplished for our stakeholders, and I feel energized about the opportunities ahead for us as we continue to demonstrate our relentless focus on advancing our strategy and executing our financial commitments as we lead the energy transition. It continues to be clear that our multi-solution Destination Zero strategy that leverages advancements and solutions from both our core and Accelera by Cummins businesses will continue to position us to succeed. We demonstrated this in 2024 as we further strengthened our position through evolving our portfolio and expanding and establishing relationships with new and long-standing key stakeholders and partners. Most notably for our core business in 2024, we introduced the Cummins HELM engine platform. Applied across Cummins' legendary B, X10, and X15 Series engine portfolios, the HELM platforms provide customers with the option to choose the fuel type, either advanced diesel or alternate fuels like natural gas and hydrogen, that best suits their business needs and offers the power and performance customers expect while also reducing emissions. Cummins began full production of the X15N natural gas engine at the Jamestown engine plant earlier this year. And we are actively engaged with some of North America's largest and most demanding heavy-duty fleets as they look to reduce their carbon footprint. Additionally, in our core business, we introduced 4 new generator sets to the award-winning Centum series, 2 each powered by Cummins' QSK50 and QSK78 engines. In response to high market demand, these new models have been engineered specifically for the most critical applications such as data centers. In order to further raise our capacity to meet rising power generation demand, we also intend to invest $200 million across our U.S., England, and India manufacturing sites. As you will see in our full year financial performance details and 2025 guidance, we are excited about the continued impressive performance and growth potential for our Power Systems business. Cummins also successfully completed the separation of our Filtration business, Atmus Filtration Technologies. Cummins will continue its focus on advancing innovative power solutions while Atmus is now well positioned to pursue its own plans for profitable growth. The separation of Atmus resulted in the tax-free exchange of shares, which reduced Cummins' shares outstanding by approximately $5.6 million in the first quarter. In our Accelera business, we completed the formation of our joint venture, Amplify Cell Technologies with Daimler Trucks & Buses, PACCAR, and EVE Energy to localize battery cell production and the battery cell supply chain in the United States. This strategic collaboration will advance zero emissions technology for electric commercial vehicles and industrial applications. Amplify began construction this year of a 21-gigawatt hour factory in Mississippi with potential for future expansion as demand grows and is targeting start of production in 2027. Lastly, as we navigate this long and messy transition for our customers, we remain committed to pacing and refocusing our investments on the most promising paths as the adoption of zero-emission solutions slows in some regions around the world. As you can see in our fourth quarter results, we recorded charges related to the reorganization of our Accelera business segment as we underwent a strategic review to streamline the business while also ensuring we are set up for long-term success. We remain committed to Accelera and its mission, and this business continues to play an important role in our Destination Zero strategy. Now I will comment on overall company performance for the fourth quarter of 2024 and cover some of our key markets. Demand for our products remained strong across many of our key markets and regions, offsetting the softening in the North America heavy-duty truck market. Revenues for the quarter totaled $8.4 billion, a decrease of 1% compared to 2023 as lower North America heavy-duty and pickup truck volumes and the reduction in sales from the separation of Atmus were partially offset by continued high demand in our global power generation markets, stronger aftermarket, and North America medium-duty truck volumes as well as improved pricing. EBITDA was $1 billion or 12.1% compared to a loss of $878 million or negative 10.3% a year ago. Fourth quarter 2024 results included $312 million of charges related to the strategic reorganization of our Accelera business segment. This compares to the fourth quarter 2023 results, which included $2 billion of costs related to the agreement to resolve U.S. regulatory claims, $42 million of costs related to our voluntary retirement and separation programs, and $33 million of costs related to the separation of the Atmus business. Excluding those items, EBITDA was $1.3 billion or 15.8% compared to $1.2 billion or 14.4% a year ago. EBITDA and gross margin dollars improved compared to the fourth quarter of 2023 as the benefits of higher power generation volume, pricing and operational efficiency more than exceeded lower North America truck volumes and the separation of Atmus. 2024 revenues were a record $34.1 billion, essentially flat with 2023 despite the decline in North America heavy-duty truck demand in the second half of the year and reduction of sales from the Atmus separation. EBITDA was a record $6.3 billion or 18.6% of sales compared to $3 billion or 8.9% of sales in 2023. 2024 results include a gain, net of transaction costs and other expenses, of $1.3 billion related to the Atmus divestiture, $312 million of charges related to the Accelera reorganization, and $29 million of first quarter restructuring expenses. This compares to the 2023 results that included $2 billion of costs related to the agreement to resolve U.S. regulatory claims, $100 million of costs related to the separation of Atmus, and $42 million of costs related to the voluntary retirement and separation programs. Excluding those items, EBITDA was a record $5.4 billion or 15.7% of sales for 2024 compared to $5.2 billion or 15.3% of sales for 2023 as the benefits of higher power generation volumes, pricing and operational efficiency more than exceeded lower second half North America truck volumes and the reduction in margin from the Atmus separation. EBITDA dollars were a record in Power Systems, Distribution, and Engine segments. Our Power Systems business, in particular, finished 2024 with a record full year EBITDA of 18.4% of sales, up from 14.7% in 2023. I'm very pleased with the performance across our core business segments, and you will see from our guidance that we are excited to continue to build on this momentum. Now let me provide our overall outlook for 2025 and then comment on individual regions and end markets. We are forecasting total company revenues for 2025 to be down 2% to up 3% compared to 2024, and EBITDA to be 16.2% to 17.2% of sales, up from 15.7% in 2024. While we expect weaker first half demand in our North America on-highway truck markets, we expect many of our markets, particularly power generation to remain strong throughout the year. Industry production for heavy-duty trucks in North America is projected to be 260,000 to 290,000 units in 2025, flat to down 10% year-over-year. We anticipate weaker first half demand. And while we do expect a prebuy in the second half of the year, the uncertainty on the exact timing and extent is driving our wider guidance range. In the medium-duty truck market, we expect the market size to be 140,000 to 155,000 units, down 5% to 15% compared to 2024, primarily driven by weaker-than-expected recent net orders and a depleting backlog. Our engine shipments for pickup trucks in North America are expected to be 130,000 to 140,000 in 2025, flat to up 5% year-over-year. In China, we project total revenue, including joint ventures, to increase 5% in 2025. We are projecting a range of down 5% to up 10% in heavy- and medium-duty truck demand in China. While export demand is expected to decline slightly, we are hopeful that the recent NS4 scrapping policy and other stimulus actions may lead to domestic demand growth. We have not, however, seen a meaningful recovery thus far. While there is still uncertainty around the China truck market for 2025, we expect strength in other markets, particularly power generation, where demand is expected to remain high as data center momentum continues. In India, we project total revenue, including joint venture to increase 10% in 2024, primarily driven by stronger power generation demand. We expect industry demand for trucks to be down 5% to up 5% for the year. For global construction, we expect flat to down 10% year-over-year, primarily driven by weak property investment and shrinking export demand in China. We project our major global high horsepower markets to remain strong in 2025. Revenues in global power generation markets are expected to increase 5% to 15%, driven by continued high demand in the data center market. Sales of mining engines are expected to be down 5% to up 5%. For aftermarket, we expect revenue improvement with a range of flat to an increase of 5% for 2025. In Accelera, we expect full year sales to be $400 million to $450 million compared to $414 million in 2024. In summary, 2024 was a record year for revenues, net income, EBITDA, and earnings per share. In 2025, we anticipate that demand will be slightly weaker in the North America on-highway truck markets, particularly in the first half of the year but offset by continued strength in the power generation market and resiliency in our Distribution business, given our strong aftermarket presence. Despite a relatively flat revenue forecast, we are expecting to improve profitability and cash flow. We remain committed to our multi-solution approach that is proving to be the right strategy for our customers, for the environment, and for the continued growth of Cummins while also returning cash to investors. Now let me turn it over to Mark, who will discuss our financial results in more detail. Mark Smith Thank you, Jen, and good morning, everyone. We delivered strong operational results in the fourth quarter, which resulted in revenue achieving the top end of our prior guidance and EBITDA margins exceeding our projections. 2024 was a record year for revenues, EBITDA, and earnings per share, reflecting the strong demand for our products and the strong hard work of our employees. Now let me go into more details on Q4 and the full year performance. There were some notable non-routine transactions in '24 and 2023, and I'll quantify those and describe our underlying results to give a better understanding of the performance from regular operations. Fourth quarter reported revenues were $8.4 billion, and EBITDA was $1 billion or 12.1% of sales. As Jen mentioned, we underwent a strategic review of our Accelera segment, which resulted in charges of $312 million, of which $305 million were noncash. Excluding this charge, we delivered EBITDA of $1.3 billion or 15.8% of sales. In the fourth quarter of '23, we reported sales of $8.4 billion and an EBITDA loss of $878 million. Excluding the regulatory settlement, Atmus separation costs, and voluntary retirement and separation program costs in Q4 2023, EBITDA was positive $1.2 billion or 14.4%. I know that's a lot to digest. In summary, on an underlying basis, EBITDA improved by 140 basis points on slightly lower sales, excluding those charges I just described. Fourth quarter revenues decreased by 1% from a year ago as organic growth was more than offset by the reduction in sales driven by the separation of Atmus. Sales in North America were flat while international revenues decreased 3%. Foreign currency movements negatively impacted sales by less than 1%. The EBITDA improvement of 140 basis points was primarily due to higher power generation volumes, pricing and operational efficiency, partially offset by lower North America truck volumes and the separation of Atmus. Now let me summarize some of the impacts by line item in the income statement. Gross margin was $2.1 billion or 25.4% of sales compared to $2 billion or 23.7% last year. The improved margins were driven by stronger power generation aftermarket demand, favorable pricing, particularly in Power Systems and Distribution and improved operational efficiency. Selling, administrative, and research expenses were $1.1 billion or 13.6% of sales compared to $1.2 billion or 14.2% last year due to lower research and development costs. Joint venture income of $87 million decreased $26 million primarily driven by lower technology fees from some of our international partnerships and costs incurred in the ramp-up of the Amplify Cell Technology battery joint venture here in the U.S., which was formed in the second quarter of '24. Other income was negative $25 million, a decrease of $75 million from a year ago, primarily driven by mark-to-market losses on investments related to company-owned life insurance. Interest expense was $89 million, a decrease of $3 million from a prior year, driven by lower weighted average interest rates. The all-in effective tax rate in the fourth quarter was 32.8%, principally due to nondeductible costs related to the Accelera reorganization. All in, net earnings for the quarter were $418 million or $3.02 per diluted share, which includes $312 million or $2.14 per diluted share of Accelera reorganization charges. Excluding the Accelera charges, EPS was $5.16 a diluted share. Operating cash flow was an inflow of $1.4 billion, just $37 million lower than the level we saw in the first quarter last year. For the full year 2024, revenues were a record $34.1 billion, slightly above a year ago and reflecting 4% growth if we exclude Atmus from both 2023 and '24. EBITDA in '24 was $6.3 billion or 18.6%. Excluding the gain in costs associated with the separation of Atmus, the Accelera charge in the fourth quarter, and first quarter restructuring expenses, EBITDA in 2024 was $5.4 billion or 15.7%. 2023 EBITDA was $3 billion or $5.2 billion and 15.3% excluding the regulatory settlement, Atmus separation costs, and voluntary retirement and separation programs. The increase in EBITDA percent was primarily driven by higher power generation volumes, pricing and operational efficiencies, more than offsetting the impact of lower North American heavy-duty truck volumes and the reduction in margin from the Atmus separation. All-in net earnings were $3.9 billion or $28.37 per diluted share compared to $735 million or $5.15 per diluted share a year ago. 2024 results included the gain related to the separation of Atmus, net of transaction costs and other expenses of $1.3 billion or $9.28 per diluted share, charges related to Accelera reorganization of $2.12 per diluted share, and first quarter restructuring costs of $0.16 per diluted share. Capital expenditures in 2024 were $1.2 billion, flat compared to 2023 as we continue to invest in the new products and capabilities to drive growth, particularly related to the HELM platforms within our core business in North America. Our long-term goal is to deliver at least 50% of operating cash flow to shareholders. And over the past 5 years, we've returned 54% in the form of share repurchase and dividends even while we absorbed the significant acquisition in the form of Meritor. In 2024, we focused our capital allocation on organic investments, dividend growth, and returning $969 million to shareholders via the cash dividend and debt reduction. We also reduced our shares outstanding by approximately 5.6 million shares from the tax-free Atmus separation share exchange. I will now summarize the 2024 results for the operating segments and provide guidance for 2025. And thankfully for you and for me, I'm going to exclude all those nonroutine items in the following pages, and thanks for staying with me as I work through that. For the Engine segment 2024 revenues were a record $11.7 billion or up $28 million compared to last year. EBITDA was 14.1% of sales, flat compared to a year ago. In 2025, we project revenues for the Engine business will be down 2% to up 3% due to expected weakness in the North American truck market, particularly in the first half of the year, slightly offset by improved demand in pickup and some international markets. 2024 EBITDA is expected to improve with projections in the range of 14.2% to 15.2%. Components segment revenues were $11.7 billion in 2024, 13% lower than the prior year, and EBITDA was 13.8% of sales compared to 14.4% in '23. There were a lot of work done to improve existing operations but that was offset in the year-over-year comparisons due to the separation of Atmus. For 2025, we expect total revenue for the Components business to range from down 5% to flat as 2024 included Atmus in the first quarter through March 18. EBITDA margins are expected to be between 13.8% and 14.8%. In the Distribution segment, revenues increased 11% in '24 compared to 2023 and were a record $11.4 billion. EBITDA was 12.1% compared to 11.8% a year ago, driven by higher power generation volumes and pricing. We expect 2025 distribution revenues to increase 2% to 7% and EBITDA margins to be in the range of 12% to 13%. In the Power Systems segment, revenues were a record $6.4 billion, up 13% over 2023 driven primarily by power generation demand, especially data center applications. EBITDA was 18.4% or 370 basis points higher than 2023, driven by stronger volume, favorable pricing, and a continued focus on operational performance and cost reduction. In 2025, we expect Power Systems revenues to be at 2% to 7% and EBITDA to improve again and be in the range of 19% to 20%. Accelera revenues increased to $414 million in 2024 with a net operating loss of $452 million as we lowered costs in existing operations, partially offset by additional losses in the Amplify cell joint venture as it advances its operations. In 2025, we anticipate revenues to be in the range of $400 million to $450 million and net losses to reduce to $385 million to $415 million as we continue to make targeted investments aligned with market demand whilst reducing cost. We currently project 2025 company revenues to be down 2% to 3%. Company EBITDA margins are projected to be approximately 16.2% to 17.2% compared to an equivalent 15.7% in 2024. Our effective tax rate this year is expected to be 24.5%, excluding any discrete items. Capital investments will be in the range of $1.4 billion to $1.5 billion as we continue to make critical investments to support future growth. To summarize, we delivered record sales and profitability in 2024, including strong results in the second half of the year even as demand in the North American heavy-duty truck market declined. Cash generation has been and will continue to be a focus as we enter 2025, enabling us to continue investing in new products for new and existing markets, returning cash to shareholders, and maintaining a strong balance sheet. Last May, we laid out our updated financial targets through 2030. Our strong performance in 2024 represented encouraging progress towards those targets. And despite a relatively flat revenue forecast and expected weakness in North American heavy-duty truck, we expect to further improve profitability and cash flow in 2025. Thanks for joining us today, and let me turn it back over to Chris. Christopher Clulow Thank you, Mark. (Event Instructions) Operator, we're ready for our first question. Operator (Operator Instructions) Angel Castillo, Morgan Stanley. Angel Castillo Congrats on another strong quarter here. Just wanted to unpack the power generation guide of 5% to 15% a little bit more. Could you just split that out between kind of price and volume? And then maybe just tying into that, I think you mentioned a new investment of $200 million in power gen. Can you just talk about maybe what's entailed in that? I thought, I guess there was already an expansion of doubling capacity so what is kind of the incremental being done? Jennifer Rumsey Yes. So as you said, we're currently in the midst of a $200 million investment across our plants in and Minnesota, U.K., and India to ramp up capacity to meet what is a growing demand for power generation products. And so you're seeing in that guide and expectation that we have been able to take up capacity. We're continuing to look at strategic pricing and where we can bring value to the customer so you've got some price in there as well. But really, it's about capacity ramp-up and continued sales of larger engines. In the power generation and data center market, it's really the 50 to 60 liter, the 78 and the 95 liters so these are large engines as we're able to bring more capacity online in our supply chain and our plants, you see that flowing through in revenue. And we expect that trend to continue over time. And so we're tracking on plan or even slightly ahead of plan to double our capacity by end of this year and looking forward to being able to meet what is a really strong demand from those customers. Angel Castillo That's very helpful. And then maybe as a follow-up, just on separate on the trucks. Can you just give us your latest thoughts on EPA27? It sounds like you're still assuming some prebuy in the second half. But just given, I guess, what we've seen from the administration so far, any thoughts on the likelihood of any kind of challenges to the EPA27 rule? Jennifer Rumsey Yes, our current view is that we expect the EPA27 regulations will stay in place. Many companies, including us, have been investing over multiple years in those products to bring those products to market, and we're looking forward to having a nationwide standard again in 27. And with that, we are still anticipating some -- both economic recovery and prebuy happening in the North America trucking market that helped bring higher revenue in the second half this year and into next year. We do anticipate there'll be more discussion and potential challenge over the greenhouse gas regulations that we see out into the 2030 and beyond time frame. Operator Stephen Volkmann, Jefferies. Stephen Volkmann Maybe starting off, can you just talk a little bit more about the Accelera restructuring? And how have you changed the focus of that business? And what are you doing less of or more of or just some color around that? Jennifer Rumsey Yes, I'll start and then Mark can add if he wants to share more detail. But really, this business has all along been about remaining agile and investing as we see technology advancing and markets starting to move in these zero emissions technologies. And we formed it through a number of acquisitions as well. So what that meant was we had kind of a distributed footprint and investment coming from those different acquisitions, and so we really looked at where we see market moving. We expect that battery electric vehicles will be important in some of our commercial vehicle and industrial applications, and we feel well positioned with the battery cell joint venture and some of the wins that we have with customers as that market develops so we're continuing to invest there. We're continuing to invest but pace investment in electrolyzers as we've seen some slowing in customer demand and uncertainty around incentives there, and then being selective in fuel cells and some of the other technologies where adoption continues to push out. But we think we're well positioned. Frankly, the slower and messier this goes, my view is the better it is strategically for Cummins. And so we're positioning ourselves in the places where we see that market and technology beginning to increase. Stephen Volkmann Okay, good. Sorry, I thought Mark was going to add something. Can I ask... Mark Smith (inaudible) Stephen Volkmann Well, you've been talking a lot as it is. Hopefully, you'll be doing less of that this year on all these adjustments. Can I just follow up -- can I follow up on the HELM platform? Do you have targets relative to the types of unit volumes you might expect either on the nat gas side or on any of the other engine -- sorry, any of the other fuel options that you can use with that platform? Jennifer Rumsey We've got -- the rate of -- the beauty of the HELM platform is it's got that fuel flexibility. And so the reality is we're still going to sell a lot of the diesel version of that, and it will be a higher efficiency version, which means lower CO2 and lower fuel costs for our customers. We've set a goal of getting to 8% on the natural gas version of that. We're starting to see customers adopt. PACCAR has launched it. Daimler Trucks will launch that 15-liter natural gas this year. Fleets are testing it. I was with a big customer last week. They're finishing their field testing. They feel good about the product, and they're looking to start to increase penetration, but it really depends on diesel fuel prices and regulation and customer CO2 goals. And so it's hard to give specific numbers on the rate of natural gas or hydrogen adoption because of that dependency on infrastructure cost and regulation. Operator Jerry Revich, Goldman Sachs. Jerry Revich In Power Systems, you had a really excellent 30% year-over-year growth in revenue per unit in the quarter, so the ramp in the supply base was progressing nicely. I'm wondering if you could just update us on how much more throughput you expect to get out of the supply base in 2025 for those large products. And I appreciate there could be a wide range of outcomes but would love to get your updated views on that. Jennifer Rumsey Well, I think it's important to remember that the revenue growth, in particular, for 2024 was also about launching those new Centum products, so we're seeing new products coming online that serve the market in addition to ramping up capacity. And for this year, it really is focused on continuing to max out our capacity capability that we have when we're making the investment and more capacity across that range of products. And the team has done a really phenomenal job of doing that, improving operating efficiency, working with the supply base to try to get as much out of what we have. But there's some major investments that need to happen by the end of this year to really get to the full doubling of capacity. Mark Smith Unfortunately, Jerry, units are not a great indicator just because the size of the generator set we've been selling is going up. The average selling price has gone up a lot over and above pricing, just the size of the set that we're selling. So the revenue has outgrown the units significant. Jerry Revich Nice problem to have. And separately on the China truck market, as you mentioned in the prepared remarks, there is some optimism in the market about potentially stronger demand. Can you just calibrate us, I believe, including the JV and wholly-owned business, China truck profits are maybe 10% of total company profits at this point. And given we're at the trough of the cycle, is it fair to think about pretty attractive incremental margins if demand does indeed surprise the upside? Mark Smith Yes on the latter. I mean, China in total, maybe on a more normal run rate would be in the range of 15% to 20% of our earnings. And yes, on-highway would typically be more than half of that so you're in the ballpark, Jerry, yes. And there's no massive structural investments going on there in the current year. So if we get more volume, we'd expect to convert that into more profits. There's also just some lumpiness around tech fees and other things. But I think the underlying operational business is well set as it's done in prior cycles when demand improves, we see that. And I think that just reinforces how well the Engine business and Components did in '24. Not just did we have weakening heavy-duty truck in the second half of the year but we had weaker China throughout the year. So hopefully, at some point, confident China is going to turn. We don't have a lot of visibility into that right now. Hopefully, that's another leg to come. Operator Tim Thein, Raymond James. Tim Thein Maybe I'll ask 1 to start on components, Mark. Just as you think about the margin outlook for '25 on kind of flat to down revenues, a pretty nice improvement. I'm wondering how much of that is -- is it maybe a benefit from kind of lapping the Atmus spin or separation? Or is there -- obviously, there's more to it than that. So maybe just a line or 2 in terms of what you're projecting there for Components. Mark Smith I think when you look across the company, we've done a lot on cost reduction. It hasn't been enormous in any given quarter, but we've been working at it really since the fourth quarter of 2023 when we announced voluntary separation package. We did a lot of work internally during 2024 to look at how we weighted the amount of resources we put between lines of business, functions, regional structures. And a lot of this work has paid off in terms of improving our cost structure and focus. And so yes, the Components business is going to benefit from some of that. We're not breaking it out separately but what was formerly known as Meritor, Drivetrain, and Braking Systems business, results have continued to improve their underlying. So I think there are a number of things. We are working incredibly hard on a flattish revenue environment to drive cost and efficiency where we can. Tim Thein Okay. And then Mark, on the Accelera, just in light of the restructuring and given what's -- how the global backdrop is changing or has changed, the expectation to get that business to EBITDA breakeven by '27, is that still in the cards or you're thinking that maybe is a tougher one to hit? Mark Smith Yes. I think overall, relative to our 2030 targets for the total company, we feel like we've had a really good start in 2024 and on track. And we're doing a bit better on the core business and headwinds have come more frequently and more severely to Accelera. So we are committed to significant loss reduction. But right now, we are not on track towards that breakeven, but we do feel we're very much on track for the overall company targets. And that's really the reason why we took more pronounced actions or the Accelera team did in the fourth quarter, recognizing that we're not going to get enormous help from demand here in the near term, Tim. So we're managing what we can and in the context of overall company results, we feel confident, but we are not, right now, on track to get to breakeven as we sit here today. Operator Kyle Menges, Citi. Kyle Menges I was hoping if you could just comment on how you're thinking about R&D spend in 2025 versus 2024, maybe more specifically within Engine and Components. And then just beyond 2025, how you're kind of thinking about that and how we should be thinking. Mark Smith Yes, good question. So I think beyond 2025 is where we should see more momentum to the downside on Engine expense. We did see some improvement through the year in the Engine business. We've got a lot of new product launches, both in Engines and Components in 2025. But after we get through those launches and through 2027, that's definitely part of our margin expansion story in those 2 businesses, but not a dramatic shift this year, some puts and takes between Engines and Components. Kyle Menges That's helpful. And then just could you comment a little bit on how you're thinking about the parts outlook for 2025? Mark Smith Yes, Parts held up pretty well, in fact, pretty a little bit better than expected in the fourth quarter across our businesses, and so we think in the range of flat to up 5%. Probably some pricing baked in there. So yes, growing in line with the economy, I would say, at least on par with the economy with what we know today. Operator Jamie Cook, Truist Securities. Jamie Cook Nice quarter. I guess similar question that Tim asked on, I think it was the Components business. Just the margins mark in Power Systems are very good despite sort of what I would call a muted top line forecast. So is that just pricing in some of the new products? And then I guess, how do you think about margin targets relative to the ones you just gave us, I guess, last year? Is it looking conservative? And then my second question obviously, lots of puts and takes around tariffs and who knows what happens. But are there any changes in your -- how your terms and conditions or contracts with your customers that if we do get into an environment where tariffs and that causes price increases, that we're able to absorb costs or increase price more frequently relative to last time within Engines, I guess? Mark Smith Great. So yes, Power Systems doing well. I think continuing to focus on supply chain efficient output. They did a great job last year so I don't want to sound like we're dissatisfied. Quite the opposite, very impressed, but still think there's more to come on raising volume, raising productivity, and a little bit on pricing Power Systems. So all of those things contribute towards raising the margin guidance for the year and quite a bit above the fourth quarter levels. And I guess if we really had a robust U.S. economy, we could see growth in some of the smaller generator sets. We have high market share in some of the consumer segments that are particularly robust. So I guess that -- we don't see signs of that, but if we want to get on to the bullish side and saw more strength in the U.S. economy, that could be another leg to help. On tariffs, by and large, our strategy is to make most of our products in the market in which they're sold. But of course, we do have a global supply chain and we -- of course, nobody knows exactly what the tariff situation is going to be. But to the extent that we do incur them, then we think it's important that the market feels those and we'll look to pass those on. Let's hope that's not significant for everybody involved. But really, we're just focused on controlling what we can control. And I think, yes, we've got secular tailwinds in Power Systems, but the biggest driver is being able to scale growth effectively and pushing out cost. And then you don't see it on the inside but the work we've done inside to try and simplify our structure, improve the speed of decision-making, all of those things help and have helped kind of raise the bar in 2024. Operator David Raso, Evercore. David Raso I'm trying to better understand the margin expansion in Engines and really, for that matter, of Components. First, the D&A, the growth in the D&A, is that mostly in Engines or Components? It's just the margin improvement is impressive but I'm just wondering it drives it down a little bit because there's more D&A than it is operational, but (inaudible) Mark Smith Well, there is an increase in D&A because that's where we're investing most of the capital in North America, particularly in the Engine business over the last couple of years. David Raso So of the [100] D&A increase, is it [50] Engines, [25] Components? Just some sense so I can get a better sense of the underlying operation. Mark Smith Yes, I mean, it won't be significantly in distribution. Power Systems, whilst we're increasing investment is still modest relative to those 2 segments. And so on an incremental basis, most of it is going to go through Engines and Components, a little bit in corporate, which ends up mostly in Engines and Components, yes. David Raso Okay, that's helpful. And then even with that, it looks like there still is some slight operating, let's say, non-D&A margin improvement in Engines. What's driving that? Is it a little bit of mix? Is it -- I'm just trying to think about maybe the new medium engines you're outperforming the market. How to think about those margins versus heavy? Because it's all wrapped in the idea of trying to figure out where do you think Engine margins are as we sort of move out of '25 and people start to pontificate about earnings power in '26 with the prebuy in the Engine division. Mark Smith Yes, I think those are all really important questions and will be big contributors to the long-term performance. In the near term, I think we'll continue to expect to do well in the aftermarket side, of which the Engine business is our biggest single driver. So that's probably where there's still some pricing opportunity into 2025. And then yes, the engineering starts coming down enormously, but I think we've come down off the peak there, Components probably going up a little bit. But those would be the main drivers. And as you can see, we haven't factored a lot in from China yet so really, it's cost control and aftermarket in the near term. Operator Avi Jaroslawicz, UBS. Avi Jaroslawicz I guess in terms of your guidance for the market outlook for North America heavy-duty trucks this year, it sounds like if, for whatever reason, (inaudible) do materialize this year that you'd expect retail demand may be still to be negative in the second half. So I guess, one, am I interpreting that correctly? And can you just discuss how you're thinking about it? Jennifer Rumsey Yes. I mean, I think if you look at the underlying performance in the heavy-duty market, spot rates dropped early in '23, so truckload carriers have really had challenges now for 2 years, and I think there's a very real chance that we'll see improvement in that over the course of this year, just depending on what the underlying economy and interest rates do. So there's some potential upside in the second half for that in addition to this prebuy phenomenon that we would anticipate would lead to a stronger second half versus first half. The range is quite wide because how high that goes is really dependent on the prebuy and when that starts. Avi Jaroslawicz Got it, okay. And then in terms of medium-duty, just breaking down kind of market share gains versus market growth for 2024. How did those net against each other? And then in terms of your sales guidance for this year within Engines, are we thinking about further share gains this year or not as much? Mark Smith I think really, I think we're talking about following the market in 2025. There's been a long track record of significant market share gains in that market. Our engine is clearly the leader in that market and there were some share gains. But going forwards, it's very much primarily going to be truck in the market, but there can be some modest changes around that from where we are now. Jennifer Rumsey (inaudible) down for the year, reflective of what we've seen in order made in backlog (inaudible) Mark Smith Yes. It's industry -- the industry orders, we will feel that, yes. Jennifer Rumsey From a product perspective, we continue to feel really positive about how our product is performing in the market and our position across medium- and heavy-duty. Operator Rob Wertheimer, Melius Research. Rob Wertheimer I had 2 questions around Power Systems, if I may. And 1 is, as this data center market continues to develop, historically at least, I suppose, selling an engine is one thing and then servicing is another. And if you have backup power, it doesn't get turned on that much and it's not as profitable. But obviously, there's a high uptime, high criticality kind of operations. Do you see any opportunity to change that profit algorithm such that you'll be making more recurring revenue or otherwise on that massive build-out of engines that you're going to do? And then secondly, if I can just wrap it in. You've had excellent results in Power Systems. I'm not sure if all of it's really this surge in data center or maybe the stuff you've touched on a couple of times on the call already, operational improvements. I wonder if you could just expand on how you've made that business better. Jennifer Rumsey Sure. So first on the data center market, so with power generation and data centers, we have engine, gen sets, and then a good portion of that business also flows through the distribution business. So the strong performance you see in the distribution business last year and the outlook is reflecting the strength in power generation as well as aftermarket. But as you noted, they don't, today, run a lot for backup power. So typically, Parts revenue is relatively low as we look at shortage of power availability and how do you meet power demand in the U.S. and around the world. There's a potential for some shift in that. And so strategically, we're considering how we think about our role in that, which was part of the discussion on micro-grids and what we do there today. But today, still very much heavily backup power and because of the high reliability demand for those applications. In terms of the Power Systems performance, we undertook now, 2 years ago, focused effort to really look at operating performance structure, how we made sure we were investing in the right products and getting returns on the investments we were making for our customers and working through some of the supply challenges that have built up through the pandemic and then the rebound in the market after that. And so that really has come together at exactly the time when this data center trend has also happened. And so we really had strong underlying operating structure and performance in the business that we continue to drive improvement in as we're also taking up volumes. And so both of those are contributing to really the remarkable profitability improvement that you've seen in Power Systems. Mark Smith Just to add, Rob, the distribution, of course, adds that extra slice of revenue on data centers. And in fact, it's fundamental to winning and supporting this data center business around the world. I think that's one of the strengths we have and a few others have. And that's why you see that the market demand is concentrated amongst a couple of large engine manufacturers like us because of that service capability. But just to underline what you said, Rob, and your intuition, it would be very wrong to attribute Power Systems improvement just to data centers. That's a journey that's still got legs left but tied -- the performance level has been elevated across that segment, including in the alternator business, which supplies across -- really across that supply chain. So we're incredibly pleased with the way that business has improved. Operator Tami Zakaria, JPMorgan. Tami Zakaria So the distribution segment guide, the 2% to 7%, it seems quite healthy. Given the underlying truck market outlook, are you able to comment on the core distribution outlook versus the power generation-related services? The reason I ask, if power generation demand holds at these levels, it seems like distribution could see another double-digit growth year in 2025. So any comments there would be helpful. Mark Smith Yes. I think you're typically seeing Parts growth maybe slightly above the rate of economic growth. And then in this cycle, you're right, the power generation demand in data centers and in some other applications has really provided that extra leg. So I would say in the short run, yes, power gen will be the main swing factor. I would say that some of the other segments, mining, oil and gas, if we look beyond this year, we'd expect to see more growth in the future. There's not enormous momentum in those businesses, but they're also important end markets for distribution. One of the reasons that we like distribution, it generates a lot of cash. It's less volatile than other parts of the business and have that really strong aftermarket piece, which doesn't get the extraordinary growth rates that underpins the kind of year-to-year level of performance. So yes, distribution is doing well. And hopefully, the global economy strengthens and then all of our businesses will do well. Tami Zakaria Got it. That's very helpful. And then 1 follow-up question on that comment that you expect some prebuy in the back half but the timing is uncertain. I'm curious what prebuy lift is embedded in the current heavy-duty and medium-duty outlook for North America? I'm just trying to understand what the market could look like, let's see, if there is no prebuy. Mark Smith There are so many factors at play but that's one of the factors we believe can help. We're going to start off at a fairly modest level in the first quarter. Although orders here yet in the fourth quarter of '24 were a little better than expected, I would say, but it's really, we're anticipating that strength in the second half to come somewhat from demand ahead of the regulations and understanding of how flexible the supply chain is for that industry. Again, I think we've all got fairly consistent views of the market at this point and we'll see how it plays out. A big factor, of course, is going to be the strength of the U.S. economy and spot rates and freight activity. All these factors weigh in. The main thing to know is we've got a stronger second half in heavy-duty truck built into our forecasts. Q1, yes, is going to probably be the low point of the year with what we expect right now. The question is, will we get the improvement in the second half? Operator We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments. Christopher Clulow Thank you, everyone, for joining our teleconference today. That concludes the question-and-answer session. As always, the Investor Relations team will be available for questions after the call. Thank you. Operator Thank you. That does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today. Sign in to access your portfolio
