Cummins hit record levels in 2022

Cummins Inc. reported its fourth quarter and full year 2022 results, with all-time highs in revenue last year and more to come this year.

Revenues for the fourth quarter of 2022 were $7.8 billion. Excluding Meritor, Inc., the acquisition of which was completed early last August, revenues were $6.6 billion, 13% higher than the same quarter in 2021.

Excluding Meritor, sales in North America increased 25% and international revenues decreased 1% compared to fourth quarter 2021, as strong demand across all global markets were offset by a market slowdown in China, as well as Russia, where operations have been suspended indefinitely.

Net income attributable to Cummins in the fourth quarter was $631 million and excluding the Meritor business and related integration costs, net income for the quarter was $644 million, compared to $394 million in 2021.

“In 2022, Cummins continued to advance its Destination Zero growth strategy through the acquisitions of Jacobs Vehicles Systems, Meritor and the Siemens Commercial Vehicles business,” said Cummins President and CEO Jennifer Rumsey. “The innovative talent, technology and capabilities these acquisitions bring will position Cummins for success as the industry decarbonizes.

“We delivered strong profitability in the fourth quarter and achieved record full year revenues, EBITDA and EPS last year. I want to thank all our employees for helping us navigate a difficult supply chain environment and making 2022 a successful year.”

Revenues for the full year were $28.1 billion. Excluding Meritor, revenues were $26.2 billion, 9% higher than 2021. Sales in North America increased 18% and international revenues decreased 2% compared to 2021, as strong demand across all global markets was partially offset by a market slowdown in China, as well as Russia, where operations have been suspended indefinitely.

Net income attributable to Cummins for the full year was $2.2 billion.

Fourth quarter results by segment

Engine Segment sales were $2.6 billion, up 9%. On-highway revenues increased 11%, driven by strong demand in the North American truck market, pricing actions and strong aftermarket demand. Off-highway revenues decreased 1%, driven by a slowdown in China construction. Sales increased 21% in North America and decreased 16% in international markets due to a decline in China demand and the indefinite suspension of operations in Russia.

Distribution Segment sales were $2.3 billion, up 13%. Revenues in North America increased 24% and international sales decreased by 5%. Higher revenues were driven by increased demand for parts, service, and whole goods, Cummins said.

Components Segment sales were $3.1 billion (excluding Meritor $1.9 billion), up 13%. Excluding Meritor, revenues in North America increased by 23% and international sales increased by 1% due to strong demand in India offset by lower demand in China.

Power Systems Segment sales were $1.3 billion, up 22%. Power generation revenues increased 25%, driven by pricing actions and increased global demand. Industrial revenues increased 17% due to strong demand for aftermarket products and increased demand in mining and oil and gas markets.

New Power Segment sales were $75 million (excluding Meritor, $61 million), up 79%. Revenues increased due to higher battery demand in the North American school bus market and higher electrolyzer sales. Cummins said costs associated with the development of fuel cells and electrolyzers, as well as products to support battery electric vehicles contributed to an EBITDA loss of $97 million.

Looking ahead

Based on its current forecast, Cummins projects full year 2023 revenues to be up 12% to 17%.

“In 2023, we anticipate that demand will remain strong in most of our key regions and markets, especially in the first half of the year,” Rumsey said. “We will continue monitoring global economic indicators closely and ensure we are prepared should economic momentum slow further.

“We expect revenue growth and margin expansion in our core business and strong growth in our New Power segment in 2023.”