Cummins Q3 sales rise 17%
By Mike Brezonick02 November 2021
Cummins Inc. reported its third quarter 2021 revenues were $6.0 billion, up 17% from the same quarter in 2020. Sales in North America rose 13% while international revenues increased 22%, driven by strong demand across all global markets outside of China compared to the same period last year.
“Demand remained strong in the third quarter as the global economy continued to improve, driving strong sales growth across most businesses and regions outside of China, which is moderating in line with expectations,” said Chairman and CEO Tom Linebarger. “Economic trends such as order activity, freight rates, and used equipment prices remain robust across a number of our key end markets which points to strong demand extending into 2022 and beyond.
“Cummins is well positioned to benefit as these markets gain momentum as we continue to see orders for our products outpace our competition. Despite this strong demand, supply chain constraints continue to impact our business as well as our customers’, resulting in rising material costs, elevated logistics expenses, and other manufacturing inefficiencies and capping revenue below our expectations three months ago.”
Based on the current forecast, Cummins is lowering its full year 2021 revenue guidance to be up approximately 20% versus last year, compared to prior guidance of up 20% to 24%.
Looking at the individual business units, sales in the Engine segment were $2.6 billion, up 22% over the same period last year. Cummins said on-highway revenues increased 22%, driven by strong demand in the North American truck market. Off-highway revenues increased 21%, driven by strong demand in North American, Asian Pacific, and European construction markets Sales increased 23% in North America and 19% in international markets, the company said.
Distribution sales were $2.0 billion, up 14%. Revenues in North America increased 10%, while international sales were up 21%. Demand increased across the power generation and engine markets in addition to parts and service compared to last year.
Sales in the Components segment were $1.8 billion, up 16%. Revenues in North America increased 21% and international sales went up 11%. Power Systems sales were up 19% to $1.2 billion, as power generation revenues rose 10% driven by growth in recreational vehicle and datacenter markets while industrial revenues went up 33% due to stronger demand in mining markets.
The New Power segment saw sales rise 28% to $23 million. Cummins said revenues increased due to greater demand in transit and school bus markets, along with the shipments of fuel cell systems to the rail market. Electrolyzer revenue fell due to timing of the commissioning of projects, Cummins said. Overall, costs associated with the development of fuel cells and electrolyzers as well as products to support battery electric vehicles ahead of widespread adoption contributed to an EBITDA loss of $58 million.