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Cummins Clocks 8% Sales Growth In Q2, Reiterates FY22 Outlook

  • Cummins Inc. CMI reported second-quarter sales growth of 7.8% year-over-year to $6.59 billion, beating the consensus of $6.48 billion.
  • EPS was $4.94 versus $4.10 a year ago.
  • Sales in North America increased 15% while international revenues decreased 2% Y/Y, driven primarily by a slowdown in China and the indefinite suspension of its operations in Russia.
  • Sales by segments: Engine $2.8 billion (+11% Y/Y), Distribution $2.3 billion (+17% Y/Y), Components $2 billion (-2% Y/Y), Power Systems $1.2 billion (+5% Y/Y), and New Power $42 million (+75% Y/Y).
  • The gross margin expanded by 202 bps to 26.2%. Operating income was $897 million (+22% Y/Y), and the margin expanded by 160 bps to 13.6%.
  • Cummins generated operating cash flow year-to-date of $763 million, compared to $955 million a year ago.
  • EBITDA was $1.06 billion compared to $974 million in 2Q21, and the margin expanded by 10 bps to 16%.
  • “High inflation and rising global interest rates have increased uncertainty about the pace of growth in the global economy. Demand for Cummins’ products and services remains strong, and as a result we have maintained our projection for full year revenues and profitability from three months ago. We continue to monitor economic conditions closely and will adjust our operating plans should the outlook for our core markets weaken,” commented President and CEO Jennifer Rumsey.
  • Also ReadCummins Gets Its First Woman CEO – Read More For Details
  • FY22 Outlook, reaffirmed: Cummins expects revenues to be up 8% and EBITDA of ~15.5%.
  • The company plans to return ~50% of operating cash flow to shareholders in the form of dividends and share repurchases.
  • Price Action: CMI shares are trading higher by 1.91% at $222.01 on the last check Tuesday.

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