The good news from Cummins keeps coming, most recently in the form of quarterly earnings that beat Wall Street estimates and prompted the company to brighten its revenue forecast for the remainder of the year.
The Columbus-based innovation and manufacturing giant reported revenue of $8.5 billion from January through March of this year, The Republic’s Andy East reported last week, driven in large part by the addition of Meritor and strong global demand.
Finanacial analysts expected Cummins would earn $4.73 per share for the quarter, but the company posted earnings of $5.55. “Overall, the company is now projecting that its full-year revenues will be up 15% to 20% this year, largely fueled by stronger demand across most markets. Cummins previously projected that revenues would be up 12% to 17% this year,” East reported.
Clearly, this is great news for Columbus and the Indiana communities where Cummins does business. The company continues to demonstrate what we’ve opined about in this space in the past: Its results continue to prove that the market and investors are bullish on Cummins’ vision, which includes an audacious goal of decarbonizing in just a few decades.
The recent news that Cummins was branding this effort Accelera is paying dividends. While still a comparatively modest portion of Cummins’ overall revenue, its sales of $85 million were up 174% compared to the first quarter last year, East reported. “Revenues increased due to higher demand for battery electric systems in the North American school bus market and the additions of the electric powertrain portion of the Meritor business and Siemens Commercial Vehicle business.”
That’s an astonishing rate of growth, and Accelera is just getting started. Its products are drivers of the future as more and more businesses and entities seek to reduce their own carbon footprints.
Yet demand for Cummins’ traditional business segments — components, engines, distribution and power systems — all continued to show sizable increases in quarterly revenue.
And despite ongoing concerns on the national level about economic slowdown and a possible recession, Cummins sees even better prospects ahead.
“It seems like management has just positioned the business really well,” Roger Lee, a senior research analyst with Columbus-based Kirr, Marbach and Co., told East.
“At least for the rest of the year, if you’re expecting revenues to go up by almost a fifth versus last year, then there are a lot of machines to be made, a lot of engines to be made,” Lee added.
“We have raised our guidance on revenue and profitability for 2023 due to continued demand for Cummins’ products and services,” CEO Jennifer Rumsey said. “We will continue monitoring global economic indicators closely to ensure we are prepared should economic momentum slow. Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders.”
Let us observe that during Rumsey’s not-quite first year at the helm, Cummins has been on the positive side of a challenging economic climate. Results matter, and so does visionary leadership. And Rumsey, a proud Columbus native, East alum and Cummins veteran, has delivered.
