Record sales were not enough as Cummins falls short of Wall Street expectations

The engine manufacturer had $675 million in net income, a 24 percent increase over the $545 million in net income in the second quarter of 2018. 

Cummins reported earnings before interest, taxes, depreciation and amortization (EBITDA) of $1.1 billion, or 17 percent of sales, compared to $897 million or 14.6 percent of sales a year ago. 

North American sales increased by 7 percent – setting a new quarterly record – with sales increases in all segments except power systems, which was hurt by lower demand from the oil and gas industry.

International revenue was down 6 percent in the second quarter compared to a year ago, with lower truck demand in Brazil, China, Europe and India.

“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 Tom Linebarger, chief executive of Cummins during a July 30 earnings report.

However, Linebarger said that the company does “expect to see a moderation in demand in the second half of the year.”

Cummins officials said they expect 2019 revenue to come in flat compared with 2018, at the low end of the flat to 4 percent growth range it previously gave. The company sees weaker truck demand internationally, as well as lower demand for parts in North America for the rest of the year. 

Headquartered in Columbus, Indiana, Cummins employs 62,600 people. The company’s products range from diesel and natural gas engines to hybrid and electric platforms.