Cummins Inc. (CMI) today reported second-quarter revenues of $6.2 billion representing a 1% increase from the same quarter in 2018.
Second-quarter sales in North America set a new record and improved by 7% while international revenues decreased by 6%. Sales in North America increased in all segments except power systems, which was negatively impacted by lower demand in oil and gas markets.
Net income attributable to Cummins in the second quarter was $675 million, or $4.27 per diluted share, compared to net income of $545 million, or $3.32 per diluted share.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were a record $1.1 billion, or 17% percent of sales, compared to $897 million or 14.6% of sales a year ago.
“We achieved record revenues, EBITDA, and operating cash flow in the first half of 2019, extending our track record of raising performance cycle over cycle,” said Chairman and CEO Tom Linebarger. “While we do expect to see a moderation in demand in the second half of the year, our financial strength combined with our diversified geographic and end market exposure will enable us to generate strong profits, continue to invest in future growth, and return cash to shareholders.”
Results from its engine segment showed:
• Sales – $2.7 billion, flat versus prior year.
•Segment EBITDA – $416 million, or 15.4% of sales, compared to $362 million or 13.4 % of sales.
• On-highway revenues increased 2% and off-highway revenues decreased by 7%.
Looking forward Cummins is expecting 2019 revenue to be flat, driven by reduced truck demand in international markets, moderating parts demand in North America, and the impact of a stronger US dollar. The company continues to expect EBITDA to be in the range of 16.25 to 16.75 percent of sales and plans to return 75 percent of Operating Cash Flow to shareholders in the form of dividends and share repurchases.
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