Latest news with #JenniferRumsey
Yahoo
05-08-2025
- Automotive
- Yahoo
Cummins (NYSE:CMI) Delivers Impressive Q2
Engine manufacturer Cummins (NYSE:CMI) announced better-than-expected revenue in Q2 CY2025, but sales fell by 1.7% year on year to $8.64 billion. Its GAAP profit of $6.43 per share was 24.7% above analysts' consensus estimates. Is now the time to buy Cummins? Find out in our full research report. Cummins (CMI) Q2 CY2025 Highlights: Revenue: $8.64 billion vs analyst estimates of $8.36 billion (1.7% year-on-year decline, 3.4% beat) EPS (GAAP): $6.43 vs analyst estimates of $5.16 (24.7% beat) Adjusted EBITDA: $1.59 billion vs analyst estimates of $1.35 billion (18.4% margin, 17.6% beat) Operating Margin: 14.2%, up from 11.9% in the same quarter last year Free Cash Flow was $554 million, up from -$1.09 billion in the same quarter last year Market Capitalization: $49.81 billion 'We delivered strong second quarter results, driven by record profitability in our Power Systems and Distribution segments,' said Jennifer Rumsey, Chair and CEO. Company Overview With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems. Revenue Growth A company's long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Cummins's 10.8% annualized revenue growth over the last five years was impressive. Its growth beat the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Cummins's recent performance shows its demand has slowed significantly as its annualized revenue growth of 2.3% over the last two years was well below its five-year trend. We also note many other Heavy Transportation Equipment businesses have faced declining sales because of cyclical headwinds. While Cummins grew slower than we'd like, it did do better than its peers. We can dig further into the company's revenue dynamics by analyzing its most important segments, Components and Engine , which are 31.2% and 33.6% of revenue. Over the last two years, Cummins's Components revenue (axles, brakes, drivelines) averaged 7.4% year-on-year declines while its Engine revenue (diesel and gas-powered engines) was flat. This quarter, Cummins's revenue fell by 1.7% year on year to $8.64 billion but beat Wall Street's estimates by 3.4%. Looking ahead, sell-side analysts expect revenue to decline by 2.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Operating Margin Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It's also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes. Cummins's operating margin has risen over the last 12 months and averaged 10% over the last five years. Its solid profitability for an industrials business shows it's an efficient company that manages its expenses effectively. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Looking at the trend in its profitability, Cummins's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. In Q2, Cummins generated an operating margin profit margin of 14.2%, up 2.3 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. Earnings Per Share We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company's growth is profitable. Cummins's EPS grew at a remarkable 13.6% compounded annual growth rate over the last five years, higher than its 10.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. Diving into the nuances of Cummins's earnings can give us a better understanding of its performance. A five-year view shows that Cummins has repurchased its stock, shrinking its share count by 6.4%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Cummins, its two-year annual EPS growth of 9.1% was lower than its five-year trend. We hope its growth can accelerate in the future. In Q2, Cummins reported EPS at $6.43, up from $5.26 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Cummins's full-year EPS of $21.27 to shrink by 5.8%. Key Takeaways from Cummins's Q2 Results We were impressed by how significantly Cummins blew past analysts' EBITDA expectations this quarter. We were also glad its Engine revenue topped Wall Street's estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 3.9% to $375.74 immediately after reporting. Indeed, Cummins had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
05-08-2025
- Business
- Yahoo
Cummins Reports Second Quarter 2025 Results
Second quarter revenues of $8.6 billion; GAAP1 Net Income of $890 million, or 10.3% of sales EBITDA in the second quarter was 18.4% of sales; Diluted EPS of $6.43 COLUMBUS, Ind., August 05, 2025--(BUSINESS WIRE)--Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2025. "We delivered strong second quarter results, driven by record profitability in our Power Systems and Distribution segments," said Jennifer Rumsey, Chair and CEO. "Our employees' resilience and commitment continue to power our success in a dynamic environment. We see a contrast across our markets with robust demand for power generation equipment supported by clear secular drivers, and our more economically sensitive markets, such as truck, where end-user confidence has declined. This contrast will become even more pronounced in the second half of the year as North America truck build rates decline sharply, starting in the third quarter. Aftermarket demand for parts and service remains stable." Second quarter revenues of $8.6 billion decreased 2% from the same quarter in 2024. Sales in North America declined 6%, and international revenues increased 5% due to higher demand in Europe and China. Net income attributable to Cummins in the second quarter was $890 million, or $6.43 per diluted share, compared to $726 million, or $5.26 per diluted share, in 2024. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.6 billion, or 18.4% of sales, compared to $1.3 billion, or 15.3% of sales, a year ago. 2025 Outlook: Due to continued economic uncertainty, the company will not be reinstating a full-year outlook for revenue or profitability at this time. "Our diversified portfolio, disciplined cost management and strong execution have enabled us to navigate recent industry challenges," said Rumsey. "However, persistent economic and regulatory uncertainty continues to impact a number of our key markets and cloud our near-term outlook for both business and market performance. We remain focused on delivering for our customers and look forward to providing additional clarity as this uncertainty subsides." Second Quarter 2025 Highlights: Cummins announced an increase in the quarterly common stock cash dividend from $1.82 to $2.00 per share. The company has increased the quarterly dividend to shareholders for 16 consecutive years. Cummins launched the new 17-liter engine platform generator, expanding on the success of the acclaimed Centum™ Series generator sets. Producing up to 1 megawatt of power, the S17 Centum genset was developed to produce a large power output within a compact footprint to meet the growing demands of power in urban environments. The new genset is designed to support a wide range of critical market segments such as commercial properties, healthcare facilities and water treatment plants. Jennifer Rumsey was named one of Barron's Top CEOs of 2025. Jennifer was recognized for her visionary leadership and commitment to innovation and sustainability. The annual list features 26 leaders whose deft guidance has put their companies in a stronger competitive position. 1 Generally Accepted Accounting Principles in the U.S. Second quarter 2025 detail (all comparisons to same period in 2024): Engine Segment Sales - $2.9 billion, down 8% Segment EBITDA - $400 million, or 13.8% of sales, compared to $445 million, or 14.1% of sales Revenues decreased 8% in North America and 7% in international markets due to lower on-highway demand in the United States and Mexico. Components Segment Sales - $2.7 billion, down 9% Segment EBITDA - $397 million, or 14.7% of sales, compared to $406 million, or 13.6% of sales Revenues in North America decreased by 15% and international sales were flat primarily due to lower on-highway demand in the United States. Distribution Segment Sales - $3.0 billion, up 7% Segment EBITDA - $445 million, or 14.6% of sales, compared to $314 million, or 11.1% of sales Revenues in North America increased 9% and international sales increased by 4% primarily due to increased demand for power generation products in the United States. Power Systems Segment Sales - $1.9 billion, up 19% Segment EBITDA - $430 million, or 22.8% of sales, compared to $301 million, or 18.9% of sales Revenues in North America increased 23% and international sales increased 16% driven primarily by increased power generation demand, particularly for the data center and mission critical markets. Accelera Segment Sales - $105 million, down 5% Segment EBITDA loss - $100 million, compared to $117 million Revenues decreased due to lower 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 from changes in tariffs and other trade disruptions; any adverse consequences resulting from entering into agreements with the U.S. Environmental Protection Agency, California Air Resources Board, the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General's Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024, 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 STATEMENTS OF NET INCOME (Unaudited) (a) Three months ended June 30, In millions, except per share amounts 2025 2024 NET SALES $ 8,643 $ 8,796 Cost of sales 6,362 6,603 GROSS MARGIN 2,281 2,193 OPERATING EXPENSES AND INCOME Selling, general and administrative expenses 779 828 Research, development and engineering expenses 357 379 Equity, royalty and interest income from investees 118 103 Other operating expense, net 37 44 OPERATING INCOME 1,226 1,045 Interest expense 87 109 Other income, net 86 41 INCOME BEFORE INCOME TAXES 1,225 977 Income tax expense 297 225 CONSOLIDATED NET INCOME 928 752 Less: Net income attributable to noncontrolling interests 38 26 NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 890 $ 726 EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. Basic $ 6.46 $ 5.30 Diluted $ 6.43 $ 5.26 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING Basic 137.8 137.1 Diluted 138.5 137.9 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. Six months ended June 30, In millions, except per share amounts 2025 2024 NET SALES $ 16,817 $ 17,199 Cost of sales 12,381 12,965 GROSS MARGIN 4,436 4,234 OPERATING EXPENSES AND INCOME Selling, general and administrative expenses 1,550 1,667 Research, development and engineering expenses 701 748 Equity, royalty and interest income from investees 249 226 Other operating expense, net 74 77 OPERATING INCOME 2,360 1,968 Interest expense 164 198 Other income, net 146 1,428 INCOME BEFORE INCOME TAXES 2,342 3,198 Income tax expense 564 418 CONSOLIDATED NET INCOME 1,778 2,780 Less: Net income attributable to noncontrolling interests 64 61 NET INCOME ATTRIBUTABLE TO CUMMINS INC. $ 1,714 $ 2,719 EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC. Basic $ 12.45 $ 19.53 Diluted $ 12.38 $ 19.42 WEIGHTED-AVERAGE COMMON SHARES OUTSTANDING Basic 137.7 139.2 Diluted 138.4 140.0 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (a) In millions, except par value June 30, 2025 December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 2,319 $ 1,671 Marketable securities 755 593 Total cash, cash equivalents and marketable securities 3,074 2,264 Accounts and notes receivable, net 5,874 5,181 Inventories 6,287 5,742 Prepaid expenses and other current assets 1,698 1,565 Total current assets 16,933 14,752 Long-term assets Property, plant and equipment, net 6,540 6,356 Investments and advances related to equity method investees 2,018 1,889 Goodwill 2,433 2,370 Other intangible assets, net 2,395 2,351 Pension assets 1,158 1,189 Other assets 2,782 2,633 Total assets $ 34,259 $ 31,540 LIABILITIES Current liabilities Accounts payable (principally trade) $ 4,151 $ 3,951 Loans payable 336 356 Commercial paper 353 1,259 Current maturities of long-term debt 615 660 Accrued compensation, benefits and retirement costs 657 1,084 Current portion of accrued product warranty 657 679 Current portion of deferred revenue 1,620 1,347 Other accrued expenses 1,926 1,898 Total current liabilities 10,315 11,234 Long-term liabilities Long-term debt 6,807 4,784 Deferred revenue 1,059 1,065 Other liabilities 3,205 3,149 Total liabilities $ 21,386 $ 20,232 EQUITY Cummins Inc. shareholders' equity Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued $ 2,624 $ 2,636 Retained earnings 22,040 20,828 Treasury stock, at cost, 84.7 and 85.1 shares (10,708 ) (10,748 ) Accumulated other comprehensive loss (2,167 ) (2,445 ) Total Cummins Inc. shareholders' equity 11,789 10,271 Noncontrolling interests 1,084 1,037 Total equity $ 12,873 $ 11,308 Total liabilities and equity $ 34,259 $ 31,540 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. CUMMINS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (a) Three months ended June 30, In millions 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 928 $ 752 Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities Depreciation and amortization 279 263 Deferred income taxes (113 ) (61 ) Equity in income of investees, net of dividends (18 ) (8 ) Pension and OPEB expense 20 10 Pension contributions and OPEB payments (13 ) (11 ) Changes in current assets and liabilities, net of acquisitions Accounts and notes receivable (186 ) (150 ) Inventories (105 ) (115 ) Other current assets (136 ) 24 Accounts payable (182 ) (64 ) Accrued expenses 243 (1,540 ) Other, net 68 49 Net cash provided by (used in) operating activities 785 (851 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (231 ) (240 ) Investments in and net advances to equity investees 6 (52 ) Investments in marketable securities—acquisitions (326 ) (334 ) Investments in marketable securities—liquidations 204 254 Other, net (22 ) (28 ) Net cash used in investing activities (369 ) (400 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 2,094 84 Net (payments) borrowings of commercial paper (1,387 ) 972 Payments on borrowings and finance lease obligations (66 ) (475 ) Dividend payments on common stock (251 ) (230 ) Payments for purchase of redeemable noncontrolling interests (55 ) — Other, net (3 ) (43 ) Net cash provided by financing activities 332 308 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 39 (8 ) Net increase (decrease) in cash and cash equivalents 787 (951 ) Cash and cash equivalents at beginning of period 1,532 ... 2,541 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,319 $ 1,590 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. Six months ended June 30, In millions 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 1,778 $ 2,780 Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities Gain related to divestiture of Atmus — (1,333 ) Depreciation and amortization 548 528 Deferred income taxes (138 ) (99 ) Equity in income of investees, net of dividends (88 ) (86 ) Pension and OPEB expense 39 19 Pension contributions and OPEB payments (26 ) (59 ) Changes in current assets and liabilities, net of acquisitions and divestiture Accounts and notes receivable (643 ) (161 ) Inventories (436 ) (469 ) Other current assets (172 ) (151 ) Accounts payable 148 263 Accrued expenses (244 ) (1,933 ) Other, net 16 126 Net cash provided by (used in) operating activities 782 (575 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (393 ) (409 ) Investments in and net advances to equity investees (54 ) (55 ) Acquisition of businesses, net of cash acquired (12 ) (58 ) Investments in marketable securities—acquisitions (783 ) (713 ) Investments in marketable securities—liquidations 636 685 Cash associated with Atmus divestiture — (174 ) Other, net (9 ) (82 ) Net cash used in investing activities (615 ) (806 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 2,146 2,482 Net (payments) borrowings of commercial paper (906 ) 85 Payments on borrowings and finance lease obligations (210 ) (1,223 ) Dividend payments on common stock (502 ) (469 ) Payments for purchase of redeemable noncontrolling interests (55 ) — Other, net (49 ) (68 ) Net cash provided by financing activities 424 807 EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 57 (15 ) Net increase (decrease) in cash and cash equivalents 648 (589 ) Cash and cash equivalents at beginning of year 1,671 2,179 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,319 $ 1,590 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. CUMMINS INC. AND SUBSIDIARIES SEGMENT INFORMATION (Unaudited) In millions Engine Components Distribution PowerSystems Accelera TotalSegments IntersegmentEliminations(1) Total Three months ended June 30, 2025 External sales $ 2,162 $ 2,295 $ 3,034 $ 1,054 $ 98 $ 8,643 $ — $ 8,643 Intersegment sales 737 410 7 835 7 1,996 (1,996 ) — Total sales 2,899 2,705 3,041 1,889 105 10,639 (1,996 ) 8,643 Research, development and engineering expenses 151 77 14 69 46 357 — 357 Equity, royalty and interest income (loss) from investees 60 10 26 27 (5 ) 118 — 118 Interest income 8 10 7 4 1 30 — 30 EBITDA (2) 400 397 445 430 (100 ) 1,572 15 1,587 Depreciation and amortization (3) 68 127 32 35 13 275 — 275 EBITDA as a percentage of segment sales 13.8 % 14.7 % 14.6 % 22.8 % NM 14.8 % 18.4 % Three months ended June 30, 2024 External sales $ 2,468 $ 2,518 $ 2,821 $ 888 $ 101 $ 8,796 $ — $ 8,796 Intersegment sales 683 464 8 701 10 1,866 (1,866 ) — Total sales 3,151 2,982 2,829 1,589 111 10,662 (1,866 ) 8,796 Research, development and engineering expenses 167 81 14 63 54 379 — 379 Equity, royalty and interest income (loss) from investees 48 13 24 26 (8 ) 103 — 103 Interest income 7 9 11 3 — 30 — 30 EBITDA (2) 445 406 314 301 (117 ) 1,349 (4 ) 1,345 Depreciation and amortization (3) 61 121 30 32 15 259 — 259 EBITDA as a percentage of segment sales 14.1 % 13.6 % 11.1 % 18.9 % NM 12.7 % 15.3 % "NM" - not meaningful information (1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended June 30, 2025 and 2024. (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, excludes the amortization of debt discount and deferred costs included in our Condensed Consolidated Statements of Net Income as interest expense. A portion of depreciation expense is included in research, development and engineering expenses. In millions Engine Components Distribution PowerSystems Accelera TotalSegments IntersegmentEliminations(1) Total Six months ended June 30, 2025 External sales $ 4,202 $ 4,565 $ 5,936 $ 1,926 $ 188 $ 16,817 $ — $ 16,817 Intersegment sales 1,468 810 12 1,612 20 3,922 (3,922 ) — Total sales 5,670 5,375 5,948 3,538 208 20,739 (3,922 ) 16,817 Research, development and engineering expenses 306 152 28 126 89 701 — 701 Equity, royalty and interest income (loss) from investees 133 17 54 56 (11 ) 249 — 249 Interest income 18 17 12 8 1 56 — 56 EBITDA (2) 858 779 821 819 (186 ) 3,091 (44 ) 3,047 Depreciation and amortization (3) 135 249 64 68 25 541 — 541 EBITDA as a percentage of total sales 15.1 % 14.5 % 13.8 % 23.1 % NM 14.9 % 18.1 % Six months ended June 30, 2024 External sales $ 4,708 $ 5,360 $ 5,350 $ 1,596 $ 185 $ 17,199 $ — $ 17,199 Intersegment sales 1,371 954 14 1,382 19 3,740 (3,740 ) — Total sales 6,079 6,314 5,364 2,978 204 20,939 (3,740 ) 17,199 Research, development and engineering expenses 321 165 28 123 109 746 2 748 Equity, royalty and interest income (loss) from investees 105 39 48 45 (11 ) 226 — 226 Interest income 14 17 22 6 — 59 — 59 EBITDA (2) 859 879 (4 ) 608 538 (218 ) 2,666 1,251 3,917 Depreciation and amortization (3) 119 246 61 66 29 521 — 521 EBITDA as a percentage of total sales 14.1 % 13.9 % 11.3 % 18.1 % NM 12.7 % 22.8 % (1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended June 30, 2025. The six months ended June 30, 2024, included a $1.3 billion gain related to the divestiture of Atmus Filtration Technologies Inc. (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 $7 million and $7 million for the six months ended June 30, 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 six months ended June 30, 2024. CUMMINS INC. AND SUBSIDIARIES SELECT FOOTNOTE DATA (Unaudited) EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES Equity, royalty and interest income from investees included in our Condensed Consolidated Statements of Net Income for the reporting periods was as follows: Three months ended Six months ended June 30, June 30, In millions 2025 2024 2025 2024 Manufacturing entities Chongqing Cummins Engine Company, Ltd. $ 22 $ 21 $ 45 $ 36 Dongfeng Cummins Engine Company, Ltd. 19 15 39 37 Beijing Foton Cummins Engine Co., Ltd. 15 10 30 23 Tata Cummins, Ltd. 7 7 17 16 All other manufacturers 14 11 21 34 Distribution entities Komatsu Cummins Chile, Ltda. 15 14 29 27 All other distributors 4 2 12 7 Cummins share of net income 96 80 193 180 Royalty and interest income 22 23 56 46 Equity, royalty and interest income from investees $ 118 $ 103 $ 249 $ 226 INCOME TAXES Our effective tax rate for 2025 is expected to approximate 24.5 percent, excluding any discrete items that may arise and potential adjustments for the "One Big Beautiful Bill Act" signed into law on July 4, 2025. Our effective tax rates for the three and six months ended June 30, 2025, were 24.2 percent and 24.1 percent, respectively. Our effective tax rates for the three and six months ended June 30, 2024, were 23.0 percent and 13.1 percent, respectively. The three months ended June 30, 2025, contained net favorable discrete tax items of $3 million, or $0.02 per diluted share, primarily due to $4 million of favorable adjustments for uncertain tax positions, partially offset by $1 million of other unfavorable tax items. The six months ended June 30, 2025, contained net favorable discrete tax items of $10 million, or $0.07 per diluted share, primarily due to $8 million of favorable adjustments for share-based compensation tax benefits and $5 million of favorable adjustments for uncertain tax positions, partially offset by $3 million of other unfavorable tax items. The three months ended June 30, 2024, contained favorable discrete tax items of $9 million, or $0.07 per share, primarily due to share-based compensation tax benefits. The six months ended June 30, 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 $30 million, or $0.21 per share, primarily due to adjustments related to audit settlements and share-based compensation tax benefits. On July 4, 2025, the "One Big Beautiful Bill Act" was signed into law, enacting significant changes to U.S. federal income tax rules affecting corporations, such as the ability to immediately deduct domestic research and development costs, restoration of elective 100 percent bonus depreciation for qualified property and changes related to the international tax provisions. We are currently assessing the impact to our consolidated financial statements. 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: Three months ended Six months ended June 30, June 30, In millions 2025 2024 2025 2024 Net income attributable to Cummins Inc. $ 890 $ 726 $ 1,714 $ 2,719 Net income attributable to Cummins Inc., as a percentage of net sales 10.3 % 8.3 % 10.2 % 15.8 % Add: Net income attributable to noncontrolling interests 38 26 64 61 Consolidated net income 928 752 1,778 2,780 Add: Interest expense 87 109 164 198 Income tax expense 297 225 564 418 Depreciation and amortization 275 259 541 521 EBITDA $ 1,587 $ 1,345 $ 3,047 $ 3,917 EBITDA, as a percentage of net sales 18.4 % 15.3 % 18.1 % 22.8 % Less: Gain related to the divestiture of Atmus — — — 1,333 Add: Atmus divestiture costs — — — 35 Restructuring actions — — — 29 EBITDA, excluding the impact of the gain recognized and the related costs for the divestiture of Atmus and restructuring actions $ 1,587 $ 1,345 $ 3,047 $ 2,648 EBITDA, excluding the impact of the gain recognized and the related costs for the divestiture of Atmus and restructuring actions, as a percentage of net sales 18.4 % 15.3 % 18.1 % 15.4 % 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 $ 976 $ — $ — $ 1,897 Medium-duty truck and bus 986 950 — — 1,936 Light-duty automotive 421 486 — — 907 Off-highway 443 487 — — 930 Total sales $ 2,771 $ 2,899 $ — $ — $ 5,670 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 Unit shipments by engine classification (including unit shipments to Power Systems and off-highway engine units included in their respective classification) were as follows: 2025 Units (1) Q1 Q2 Q3 Q4 YTD Heavy-duty 26,700 29,600 — — 56,300 Medium-duty 75,200 73,400 — — 148,600 Light-duty 39,100 44,000 — — 83,100 Total units 141,000 147,000 — — 288,000 2024 Units (1) Q1 Q2 Q3 Q4 YTD Heavy-duty 33,600 37,500 32,400 29,400 132,900 Medium-duty 75,800 79,600 79,200 75,700 310,300 Light-duty 54,800 57,200 41,400 36,000 189,400 Total units 164,200 174,300 153,000 141,100 632,600 (1) Unit shipments exclude aftermarket parts. 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 $ 1,095 $ — $ — $ 2,151 Emission solutions 902 900 — — 1,802 Components and software 595 587 — — 1,182 Automated transmissions 117 123 — — 240 Total sales $ 2,670 $ 2,705 $ — $ — $ 5,375 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 Total sales $ 3,332 $ 2,982 $ 2,724 $ 2,641 $ 11,679 (1) Included sales through the March 18, 2024, divestiture. 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 $ 1,200 $ — $ — $ 2,290 Parts 1,031 1,015 — — 2,046 Service 416 439 — — 855 Engines 370 387 — — 757 Total sales $ 2,907 $ 3,041 $ — $ — $ 5,948 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 Power Systems Segment Sales by Product Line Sales for our Power Systems segment by product line were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 1,001 $ 1,205 $ — $ — $ 2,206 Industrial 498 506 — — 1,004 Generator technologies 150 178 — — 328 Total sales $ 1,649 $ 1,889 $ — $ — $ 3,538 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 View source version on Contacts Melinda KoskiExternal Sign in to access your portfolio
Business Wire
05-08-2025
- Business
- Business Wire
Cummins Reports Second Quarter 2025 Results
COLUMBUS, Ind.--(BUSINESS WIRE)--Cummins Inc. (NYSE: CMI) today reported results for the second quarter of 2025. 'We delivered strong second quarter results, driven by record profitability in our Power Systems and Distribution segments,' said Jennifer Rumsey, Chair and CEO. 'Our employees' resilience and commitment continue to power our success in a dynamic environment. We see a contrast across our markets with robust demand for power generation equipment supported by clear secular drivers, and our more economically sensitive markets, such as truck, where end-user confidence has declined. This contrast will become even more pronounced in the second half of the year as North America truck build rates decline sharply, starting in the third quarter. Aftermarket demand for parts and service remains stable.' Second quarter revenues of $8.6 billion decreased 2% from the same quarter in 2024. Sales in North America declined 6%, and international revenues increased 5% due to higher demand in Europe and China. Net income attributable to Cummins in the second quarter was $890 million, or $6.43 per diluted share, compared to $726 million, or $5.26 per diluted share, in 2024. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.6 billion, or 18.4% of sales, compared to $1.3 billion, or 15.3% of sales, a year ago. 2025 Outlook: Due to continued economic uncertainty, the company will not be reinstating a full-year outlook for revenue or profitability at this time. 'Our diversified portfolio, disciplined cost management and strong execution have enabled us to navigate recent industry challenges,' said Rumsey. 'However, persistent economic and regulatory uncertainty continues to impact a number of our key markets and cloud our near-term outlook for both business and market performance. We remain focused on delivering for our customers and look forward to providing additional clarity as this uncertainty subsides.' Second Quarter 2025 Highlights: Cummins announced an increase in the quarterly common stock cash dividend from $1.82 to $2.00 per share. The company has increased the quarterly dividend to shareholders for 16 consecutive years. Cummins launched the new 17-liter engine platform generator, expanding on the success of the acclaimed Centum™ Series generator sets. Producing up to 1 megawatt of power, the S17 Centum genset was developed to produce a large power output within a compact footprint to meet the growing demands of power in urban environments. The new genset is designed to support a wide range of critical market segments such as commercial properties, healthcare facilities and water treatment plants. Jennifer Rumsey was named one of Barron's Top CEOs of 2025. Jennifer was recognized for her visionary leadership and commitment to innovation and sustainability. The annual list features 26 leaders whose deft guidance has put their companies in a stronger competitive position. 1 Generally Accepted Accounting Principles in the U.S. Second quarter 2025 detail (all comparisons to same period in 2024): Engine Segment Sales - $2.9 billion, down 8% Segment EBITDA - $400 million, or 13.8% of sales, compared to $445 million, or 14.1% of sales Revenues decreased 8% in North America and 7% in international markets due to lower on-highway demand in the United States and Mexico. Components Segment Sales - $2.7 billion, down 9% Segment EBITDA - $397 million, or 14.7% of sales, compared to $406 million, or 13.6% of sales Revenues in North America decreased by 15% and international sales were flat primarily due to lower on-highway demand in the United States. Distribution Segment Sales - $3.0 billion, up 7% Segment EBITDA - $445 million, or 14.6% of sales, compared to $314 million, or 11.1% of sales Revenues in North America increased 9% and international sales increased by 4% primarily due to increased demand for power generation products in the United States. Power Systems Segment Sales - $1.9 billion, up 19% Segment EBITDA - $430 million, or 22.8% of sales, compared to $301 million, or 18.9% of sales Revenues in North America increased 23% and international sales increased 16% driven primarily by increased power generation demand, particularly for the data center and mission critical markets. Accelera Segment Sales - $105 million, down 5% Segment EBITDA loss - $100 million, compared to $117 million Revenues decreased due to lower 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 from changes in tariffs and other trade disruptions; any adverse consequences resulting from entering into agreements with the U.S. Environmental Protection Agency, California Air Resources Board, the Environmental and Natural Resources Division of the U.S. Department of Justice and the California Attorney General's Office to resolve certain regulatory civil claims regarding our emissions certification and compliance process for certain engines primarily used in pick-up truck applications in the U.S., which became final and effective in April 2024, 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 June 30, 2025 December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 2,319 $ 1,671 Marketable securities 755 593 Total cash, cash equivalents and marketable securities 3,074 2,264 Accounts and notes receivable, net 5,874 5,181 Inventories 6,287 5,742 Prepaid expenses and other current assets 1,698 1,565 Total current assets 16,933 14,752 Long-term assets Property, plant and equipment, net 6,540 6,356 Investments and advances related to equity method investees 2,018 1,889 Goodwill 2,433 2,370 Other intangible assets, net 2,395 2,351 Pension assets 1,158 1,189 Other assets 2,782 2,633 Total assets $ 34,259 $ 31,540 LIABILITIES Current liabilities Accounts payable (principally trade) $ 4,151 $ 3,951 Loans payable 336 356 Commercial paper 353 1,259 Current maturities of long-term debt 615 660 Accrued compensation, benefits and retirement costs 657 1,084 Current portion of accrued product warranty 657 679 Current portion of deferred revenue 1,620 1,347 Other accrued expenses 1,926 1,898 Total current liabilities 10,315 11,234 Long-term liabilities Long-term debt 6,807 4,784 Deferred revenue 1,059 1,065 Other liabilities 3,205 3,149 Total liabilities $ 21,386 $ 20,232 EQUITY Cummins Inc. shareholders' equity Common stock, $2.50 par value, 500 shares authorized, 222.5 and 222.5 shares issued $ 2,624 $ 2,636 Retained earnings 22,040 20,828 Treasury stock, at cost, 84.7 and 85.1 shares (10,708 ) (10,748 ) Accumulated other comprehensive loss (2,167 ) (2,445 ) Total Cummins Inc. shareholders' equity 11,789 10,271 Noncontrolling interests 1,084 1,037 Total equity $ 12,873 $ 11,308 Total liabilities and equity $ 34,259 $ 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 June 30, In millions 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 928 $ 752 Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities Depreciation and amortization 279 263 Deferred income taxes (113 ) (61 ) Equity in income of investees, net of dividends (18 ) (8 ) Pension and OPEB expense 20 10 Pension contributions and OPEB payments (13 ) (11 ) Changes in current assets and liabilities, net of acquisitions Accounts and notes receivable (186 ) (150 ) Inventories (105 ) (115 ) Other current assets (136 ) 24 Accounts payable (182 ) (64 ) Accrued expenses 243 (1,540 ) Other, net 68 49 Net cash provided by (used in) operating activities 785 (851 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (231 ) (240 ) Investments in and net advances to equity investees 6 (52 ) Investments in marketable securities—acquisitions (326 ) (334 ) Investments in marketable securities—liquidations 204 254 Other, net (22 ) (28 ) Net cash used in investing activities (369 ) (400 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 2,094 84 Net (payments) borrowings of commercial paper (1,387 ) 972 Payments on borrowings and finance lease obligations (66 ) (475 ) Dividend payments on common stock (251 ) (230 ) Payments for purchase of redeemable noncontrolling interests (55 ) — Other, net (3 ) (43 ) Net cash provided by financing activities 332 308 39 (8 ) Net increase (decrease) in cash and cash equivalents 787 (951 ) Cash and cash equivalents at beginning of period 1,532 2,541 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,319 $ 1,590 (a) Prepared on an unaudited basis in accordance with accounting principles generally accepted in the United States of America. Expand Six months ended June 30, In millions 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES Consolidated net income $ 1,778 $ 2,780 Adjustments to reconcile consolidated net income to net cash provided by (used in) operating activities Gain related to divestiture of Atmus — (1,333 ) Depreciation and amortization 548 528 Deferred income taxes (138 ) (99 ) Equity in income of investees, net of dividends (88 ) (86 ) Pension and OPEB expense 39 19 Pension contributions and OPEB payments (26 ) (59 ) Changes in current assets and liabilities, net of acquisitions and divestiture Accounts and notes receivable (643 ) (161 ) Inventories (436 ) (469 ) Other current assets (172 ) (151 ) Accounts payable 148 263 Accrued expenses (244 ) (1,933 ) Other, net 16 126 Net cash provided by (used in) operating activities 782 (575 ) CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (393 ) (409 ) Investments in and net advances to equity investees (54 ) (55 ) Acquisition of businesses, net of cash acquired (12 ) (58 ) Investments in marketable securities—acquisitions (783 ) (713 ) Investments in marketable securities—liquidations 636 685 Cash associated with Atmus divestiture — (174 ) Other, net (9 ) (82 ) Net cash used in investing activities (615 ) (806 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 2,146 2,482 Net (payments) borrowings of commercial paper (906 ) 85 Payments on borrowings and finance lease obligations (210 ) (1,223 ) Dividend payments on common stock (502 ) (469 ) Payments for purchase of redeemable noncontrolling interests (55 ) — Other, net (49 ) (68 ) Net cash provided by financing activities 424 807 57 (15 ) Net increase (decrease) in cash and cash equivalents 648 (589 ) Cash and cash equivalents at beginning of year 1,671 2,179 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,319 $ 1,590 (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 June 30, 2025 External sales $ 2,162 $ 2,295 $ 3,034 $ 1,054 $ 98 $ 8,643 $ — $ 8,643 Intersegment sales 737 410 7 835 7 1,996 (1,996 ) — Total sales 2,899 2,705 3,041 1,889 105 10,639 (1,996 ) 8,643 Research, development and engineering expenses 151 77 14 69 46 357 — 357 Equity, royalty and interest income (loss) from investees 60 10 26 27 (5 ) 118 — 118 Interest income 8 10 7 4 1 30 — 30 EBITDA (2) 400 397 445 430 (100 ) 1,572 15 1,587 Depreciation and amortization (3) 68 127 32 35 13 275 — 275 EBITDA as a percentage of segment sales 13.8 % 14.7 % 14.6 % 22.8 % NM 14.8 % 18.4 % Three months ended June 30, 2024 External sales $ 2,468 $ 2,518 $ 2,821 $ 888 $ 101 $ 8,796 $ — $ 8,796 Intersegment sales 683 464 8 701 10 1,866 (1,866 ) — Total sales 3,151 2,982 2,829 1,589 111 10,662 (1,866 ) 8,796 Research, development and engineering expenses 167 81 14 63 54 379 — 379 Equity, royalty and interest income (loss) from investees 48 13 24 26 (8 ) 103 — 103 Interest income 7 9 11 3 — 30 — 30 EBITDA (2) 445 406 314 301 (117 ) 1,349 (4 ) 1,345 Depreciation and amortization (3) 61 121 30 32 15 259 — 259 EBITDA as a percentage of segment sales 14.1 % 13.6 % 11.1 % 18.9 % NM 12.7 % 15.3 % "NM" - not meaningful information (1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the three months ended June 30, 2025 and 2024. (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, excludes the amortization of debt discount and deferred costs included in our Condensed Consolidated Statements of Net Income as interest expense. A portion of depreciation expense is included in research, development and engineering expenses. Expand In millions Engine Components Distribution Power Systems Accelera Total Segments Intersegment Eliminations (1) Total Six months ended June 30, 2025 External sales $ 4,202 $ 4,565 $ 5,936 $ 1,926 $ 188 $ 16,817 $ — $ 16,817 Intersegment sales 1,468 810 12 1,612 20 3,922 (3,922 ) — Total sales 5,670 5,375 5,948 3,538 208 20,739 (3,922 ) 16,817 Research, development and engineering expenses 306 152 28 126 89 701 — 701 Equity, royalty and interest income (loss) from investees 133 17 54 56 (11 ) 249 — 249 Interest income 18 17 12 8 1 56 — 56 EBITDA (2) 858 779 821 819 (186 ) 3,091 (44 ) 3,047 Depreciation and amortization (3) 135 249 64 68 25 541 — 541 EBITDA as a percentage of total sales 15.1 % 14.5 % 13.8 % 23.1 % NM 14.9 % 18.1 % Six months ended June 30, 2024 External sales $ 4,708 $ 5,360 $ 5,350 $ 1,596 $ 185 $ 17,199 $ — $ 17,199 Intersegment sales 1,371 954 14 1,382 19 3,740 (3,740 ) — Total sales 6,079 6,314 5,364 2,978 204 20,939 (3,740 ) 17,199 Research, development and engineering expenses 321 165 28 123 109 746 2 748 Equity, royalty and interest income (loss) from investees 105 39 48 45 (11 ) 226 — 226 Interest income 14 17 22 6 — 59 — 59 EBITDA (2) 859 879 (4 ) 608 538 (218 ) 2,666 1,251 Depreciation and amortization (3) 119 246 61 66 29 521 — 521 EBITDA as a percentage of total sales 14.1 % 13.9 % 11.3 % 18.1 % NM 12.7 % 22.8 % (1) Included intersegment sales, intersegment profit in inventory and unallocated corporate expenses. There were no significant unallocated corporate expenses for the six months ended June 30, 2025. The six months ended June 30, 2024, included a $1.3 billion gain related to the divestiture of Atmus Filtration Technologies Inc. (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 $7 million and $7 million for the six months ended June 30, 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 six months ended June 30, 2024. Expand CUMMINS INC. AND SUBSIDIARIES SELECT FOOTNOTE DATA (Unaudited) EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES 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 is expected to approximate 24.5 percent, excluding any discrete items that may arise and potential adjustments for the "One Big Beautiful Bill Act" signed into law on July 4, 2025. Our effective tax rates for the three and six months ended June 30, 2025, were 24.2 percent and 24.1 percent, respectively. Our effective tax rates for the three and six months ended June 30, 2024, were 23.0 percent and 13.1 percent, respectively. The three months ended June 30, 2025, contained net favorable discrete tax items of $3 million, or $0.02 per diluted share, primarily due to $4 million of favorable adjustments for uncertain tax positions, partially offset by $1 million of other unfavorable tax items. The six months ended June 30, 2025, contained net favorable discrete tax items of $10 million, or $0.07 per diluted share, primarily due to $8 million of favorable adjustments for share-based compensation tax benefits and $5 million of favorable adjustments for uncertain tax positions, partially offset by $3 million of other unfavorable tax items. The three months ended June 30, 2024, contained favorable discrete tax items of $9 million, or $0.07 per share, primarily due to share-based compensation tax benefits. The six months ended June 30, 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 $30 million, or $0.21 per share, primarily due to adjustments related to audit settlements and share-based compensation tax benefits. On July 4, 2025, the 'One Big Beautiful Bill Act' was signed into law, enacting significant changes to U.S. federal income tax rules affecting corporations, such as the ability to immediately deduct domestic research and development costs, restoration of elective 100 percent bonus depreciation for qualified property and changes related to the international tax provisions. We are currently assessing the impact to our consolidated financial statements. CUMMINS INC. AND SUBSIDIARIES (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 $ 976 $ — $ — $ 1,897 Medium-duty truck and bus 986 950 — — 1,936 Light-duty automotive 421 486 — — 907 Off-highway 443 487 — — 930 Total sales $ 2,771 $ 2,899 $ — $ — $ 5,670 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: 2025 Units (1) Q1 Q2 Q3 Q4 YTD Heavy-duty 26,700 29,600 — — 56,300 Medium-duty 75,200 73,400 — — 148,600 Light-duty 39,100 44,000 — — 83,100 Total units 141,000 147,000 — — 288,000 2024 Units (1) Q1 Q2 Q3 Q4 YTD Heavy-duty 33,600 37,500 32,400 29,400 132,900 Medium-duty 75,800 79,600 79,200 75,700 310,300 Light-duty 54,800 57,200 41,400 36,000 189,400 (1) Unit shipments exclude aftermarket parts. Expand 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 $ 1,095 $ — $ — $ 2,151 Emission solutions 902 900 — — 1,802 Components and software 595 587 — — 1,182 Automated transmissions 117 123 — — 240 Total sales $ 2,670 $ 2,705 $ — $ — $ 5,375 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 Total sales $ 3,332 $ 2,982 $ 2,724 $ 2,641 $ 11,679 (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 $ 1,200 $ — $ — $ 2,290 Parts 1,031 1,015 — — 2,046 Service 416 439 — — 855 Engines 370 387 — — 757 Total sales $ 2,907 $ 3,041 $ — $ — $ 5,948 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 Sales for our Power Systems segment by product line were as follows: 2025 In millions Q1 Q2 Q3 Q4 YTD Power generation $ 1,001 $ 1,205 $ — $ — $ 2,206 Industrial 498 506 — — 1,004 Generator technologies 150 178 — — 328 Total sales $ 1,649 $ 1,889 $ — $ — $ 3,538 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
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.
