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Jun 30, 2022
Cummins Q2 2022 Earnings Report
Cummins achieved record revenues and solid profitability.
Key Takeaways
Cummins reported record revenues of $6.6 billion and net income of $702 million in Q2 2022. Demand for products remained strong across most key markets, except China. The company is maintaining its full year 2022 guidance, expecting revenue to be up 8 percent and EBITDA of approximately 15.5 percent.
Second quarter revenues reached $6.6 billion, with GAAP Net Income of $702 million, representing 10.7% of sales.
EBITDA for the second quarter was 16.0% of sales, with diluted EPS of $4.94.
Q2 results included $29 million in costs related to the Filtration business separation and a $47 million benefit from adjusting reserves related to the suspension of operations in Russia.
The company is maintaining its full year 2022 guidance, expecting revenue to increase by 8% and an EBITDA margin of approximately 15.5%.
Cummins
Cummins
Cummins Revenue by Segment
Revenue by Segment
Engine Revenue
CapyFin.comComponents Revenue
CapyFin.comDistribution Revenue
CapyFin.comPower Systems Revenue
CapyFin.comAccelera Revenue
CapyFin.com Forward Guidance
Cummins is maintaining its full year 2022 guidance, expecting revenue to be up 8 percent and EBITDA of approximately 15.5 percent. The company plans to return approximately 50 percent of Operating Cash Flow to shareholders in the form of dividends and share repurchases.
Positive Outlook
- Demand for Cummins’ products and services remains strong.
- Completed the acquisition of JVS, adding key technologies for emissions regulations.
- Meritor's shareholders voted in favor of the Cummins acquisition bid.
- Announced collaborations with Daimler Truck North America, Scania, and Komatsu to deliver fuel cell electric powertrains.
- Working with Chevron and Walmart to integrate Cummins X15N natural gas engine into Walmart’s heavy-duty truck fleet.
Challenges Ahead
- High inflation and rising global interest rates have increased uncertainty about the pace of growth in the global economy.
- Results were impacted by adjustments to the reserves related to the indefinite suspension of our operations in Russia.
- Experienced $48 million of mark to market losses on investments that underpin our unqualified benefit plans.
- The company continues to monitor economic conditions closely and will adjust operating plans should the outlook for core markets weaken.
- Costs associated with the development of fuel cells and electrolyzers as well as products to support battery electric vehicles are contributing to EBITDA losses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income