Cummins Inc (CMI) Q3 2024 Earnings Call Highlights: Strong EBITDA Growth Amid Flat Revenue

GuruFocus News
4 min read

In This Article:

  • Revenue: $8.5 billion, flat compared to Q3 2023.

  • EBITDA: $1.4 billion or 16.4% of sales, up from $1.2 billion or 14.6% a year ago.

  • North America Revenue: Declined 1% to $5.2 billion.

  • International Revenue: Increased by 2% compared to last year.

  • Gross Margin: $2.2 billion or 25.7% of sales, up from 24.6% last year.

  • Net Earnings: $809 million or $5.96 per diluted share, compared to $656 million or $4.59 per diluted share in 2023.

  • Operating Cash Flow: Inflow of $640 million for the quarter.

  • Power Systems Revenue: $1.7 billion, an increase of 17%.

  • Distribution Revenue: Increased 16% to a record $3 billion.

  • Components Revenue: $2.7 billion, a decrease of 16% from the prior year.

  • Engine Segment Revenue: $2.9 billion, a decrease of 1% from a year ago.

  • Effective Tax Rate: 19.2% for the third quarter.

  • Full Year Revenue Outlook: Down 3% to flat.

  • Full Year EBITDA Guidance: Approximately 15.5%.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Cummins Inc (NYSE:CMI) reported strong revenue and profitability in Q3 2024, with EBITDA reaching $1.4 billion or 16.4% of sales, up from 14.6% a year ago.

  • The company achieved record sales and profitability in its Power Systems segment, driven by increased demand for power generation products, particularly for data centers.

  • Cummins Inc (NYSE:CMI) improved its full-year EBITDA guidance to approximately 15.5%, at the top end of its prior range, due to strong performance in power systems and distribution.

  • The company successfully launched full production of its natural gas engine at the Jamestown engine plant, marking a significant step in its decarbonization strategy.

  • International revenues increased by 2% compared to last year, with strong demand in China for power generation equipment and a 49% increase in power generation revenues in India.

Negative Points

  • North American revenues declined by 1% due to a softening heavy-duty truck market and lower light-duty volumes.

  • The separation of Atmos negatively impacted sales, contributing to a flat revenue performance compared to Q3 2023.

  • Cummins Inc (NYSE:CMI) anticipates further softening in the North American heavy-duty truck market in Q4 2024.

  • The company faced disruptions in its components segment due to hurricane impacts, affecting production and incurring additional costs.

  • Despite strong performance in some areas, the company projects a decrease in total revenue in China by 4% for 2024, due to a weak domestic diesel truck market.

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