• ITVI.USA
    15,530.580
    61.700
    0.4%
  • OTRI.USA
    24.320
    -0.110
    -0.5%
  • OTVI.USA
    15,484.110
    63.600
    0.4%
  • TLT.USA
    2.700
    -0.010
    -0.4%
  • TSTOPVRPM.ATLPHL
    2.500
    -0.050
    -2%
  • TSTOPVRPM.CHIATL
    3.080
    0.050
    1.7%
  • TSTOPVRPM.DALLAX
    1.370
    -0.080
    -5.5%
  • TSTOPVRPM.LAXDAL
    2.950
    0.040
    1.4%
  • TSTOPVRPM.PHLCHI
    1.690
    -0.010
    -0.6%
  • TSTOPVRPM.LAXSEA
    3.130
    0.110
    3.6%
  • WAIT.USA
    120.000
    0.000
    0%
  • ITVI.USA
    15,530.580
    61.700
    0.4%
  • OTRI.USA
    24.320
    -0.110
    -0.5%
  • OTVI.USA
    15,484.110
    63.600
    0.4%
  • TLT.USA
    2.700
    -0.010
    -0.4%
  • TSTOPVRPM.ATLPHL
    2.500
    -0.050
    -2%
  • TSTOPVRPM.CHIATL
    3.080
    0.050
    1.7%
  • TSTOPVRPM.DALLAX
    1.370
    -0.080
    -5.5%
  • TSTOPVRPM.LAXDAL
    2.950
    0.040
    1.4%
  • TSTOPVRPM.PHLCHI
    1.690
    -0.010
    -0.6%
  • TSTOPVRPM.LAXSEA
    3.130
    0.110
    3.6%
  • WAIT.USA
    120.000
    0.000
    0%
EquipmentNewsTrucking

China rebound helps Cummins post Q2 earnings and sales beat

But quarterly sales decline most severe in engine maker’s 101-year history

Engine maker Cummins Inc. (NYSE: CMI) soundly thrashed estimates for its sales and profits in the second quarter, riding a rebound in demand as the Chinese economy bounced back from the coronavirus pandemic.

“Many of our [Chinese] facilities went from complete shutdown in February and March to producing record volumes in the second quarter,” CEO Tom Linebarger said in a statement.

Cummins’ earnings before interest, taxes, depreciation and amortization (EBITDA) was $549 million, or $1.86 per fully diluted share. That beat a $356.1 million consensus of analysts who cover the company by 88 cents per fully diluted share. 

EBITDA was 14.3% of sales compared to $1.1 billion, or 17%, of sales a year ago.

Second-quarter revenues of $3.9 billion were down $38.1%. But that was $170 million better than expected. 

“In the face of the most severe decline in quarterly sales in our [101-year] history, we delivered solid profitability while meeting commitments to our customers who provide products critical to the functioning of the global economy,” Linebarger said.

China was the exception to a brutal quarter. Shutdowns by truck manufacturers led to lower demand in most markets and regions. Sales in North America declined by 48% while international revenues fell 22%.

Cummins said it expects third-quarter revenues to improve from second-quarter levels. But it withheld financial guidance because of uncertainty around how COVID-19 will impact demand.

The company ended the quarter with$2.1 billion in cash, cash equivalents and marketable securities. It also can borrow $3.5 billion.

“Our strong financial position will enable us to continue to prioritize our investments in technology and new products including advanced diesel engines, battery-electric powertrains, fuel cells, and hydrogen electrolyzers that will help drive future profitable growth,” Linebarger said.

Cummins’ shares traded up more than 6% at $203.45 intraday.

Related articles:

Cummins counts on century-long survival skills to weather pandemic

Cummins, 3M team up on filters for high-tech protective gear

Cummins repurposing engine filtration material to make N95 masks

Click for more FreightWaves stories by Alan Adler.

Tags

Alan Adler

Alan Adler is a Detroit-based award-winning journalist who worked for The Associated Press, the Detroit Free Press and most recently as Detroit Bureau Chief for Trucks.com. He also spent two decades in domestic and international media relations and executive communications with General Motors.
Close