Cummins (CMI) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues reached a record $8.8 billion, up 2% year-over-year, with GAAP net income of $726 million and diluted EPS of $5.26, driven by strong North American and power generation demand, partially offset by the Atmus separation.

• EBITDA was $1.35 billion (15.3% margin), up from $1.3 billion (15.1%) a year ago, reflecting higher volumes and pricing.

• The Atmus Filtration Technologies divestiture in March 2024 resulted in a $1.3 billion gain, significantly impacting year-to-date results.

• $1.9 billion in payments were made in Q2 2024 to resolve regulatory civil claims related to emissions certification and compliance.

• Dividend per share increased to $1.82 in July 2024, marking 15 consecutive years of increases.

Financial highlights

• North America revenues grew 4% to $5.5 billion, while international revenues declined 2%; gross margin was $2.19 billion (24.9% of sales), flat year-over-year.

• Net earnings were $726 million ($5.26 per diluted share), up from $720 million ($5.05) in Q2 2023.

• Operating cash flow was an outflow of $851 million due to a $1.9 billion regulatory settlement; excluding this, inflow was $1.1 billion, more than double last year.

• Return on average net assets (ROANA) was 29%, and return on invested capital (ROIC) was 17% for the last twelve months.

• Cash and marketable securities totaled $2.18 billion at quarter-end.

Outlook and guidance

• Full-year 2024 revenue guidance raised to down 3% to flat, improved from prior guidance; EBITDA margin expected between 15.0% and 15.5%.

• North America heavy-duty truck market forecast unchanged at 255,000-275,000 units; medium-duty truck forecast raised to 150,000-160,000 units.

• Power generation market guidance raised to up 15%-20% year-over-year.

• Accelera full-year sales expected at $400-$450 million, down $50 million from prior guide.

• Capital expenditures projected at $1.2-$1.3 billion for 2024.