Cummins Inc. (NYSE: CMI) has released its fourth quarter and full year 2023 results.
“High global demand for Cummins’ diverse set of innovative products drove record full-year revenues and operating cash flow in 2023,” said Jennifer Rumsey, chair and CEO. “Excluding the impacts related to the agreement to resolve U.S. regulatory claims, 2023 was a record year for EBITDA, net income and EPS for Cummins. Also, EBITDA percent improved year over year in the components, distribution and power systems segments. I want to thank all our employees for delivering high-quality products to our customers and making 2023 a successful year.”
Fourth quarter 2023 revenues of $8.5 billion increased 10% from the same quarter in 2022. Sales in North America increased 8% and international revenues increased 13%, reflecting strong demand across most of Cummins’ global markets during the period, the company said.
In the fourth quarter of 2023, net loss was $1.4 billion, or $(10.01) per diluted share, compared to net earnings of $631 million, or $4.43 per diluted share, in 2022. The results reflect the recording of a charge related to the agreement to resolve U.S. regulatory claims previously announced in December of $2.04 billion, or $13.76 per diluted share; costs related to the voluntary retirement and separation programs of $42 million, or $0.22 per diluted share; and costs related to the separation of Atmus of $33 million, or $0.17 per diluted share. The fourth quarter of 2022 included $19 million, or $0.11 per diluted share, of costs related to the separation of Atmus. The tax rate in the fourth quarter of 2023 was negative 13.3% due primarily to the nondeductible costs related to the agreement to resolve U.S. regulatory claims.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter of 2023 was a loss of $878 million, or negative 10.3% of sales, compared to positive $1.1 billion, or 14.2% of sales, a year ago. EBITDA for the fourth quarter of 2023 and the fourth quarter of 2022 included the costs noted above.
Revenues for the full year 2023 were $34.1 billion, 21% higher than 2022. Sales in North America increased 22% and international revenues increased 20% compared to 2022 due to the addition of Meritor and strong demand across most global markets.
Net income for the full year 2023 was $735 million, or $5.15 per diluted share, compared to $2.2 billion, or $15.12 per diluted share, in 2022. The 2023 results included costs related to the agreement to resolve U.S. regulatory claims of $2.04 billion, or $13.78 per diluted share, costs related to the separation of Atmus of $100 million, or $0.54 per diluted share, and costs related to the voluntary retirement and separation programs of $42 million, or $0.22 per diluted share. Full year 2022 results included costs related to the indefinite suspension of operations in Russia of $111 million, or $0.72 per diluted share and costs related to the separation of Atmus of $81 million, or $0.45 per diluted share. The tax rate in 2023 was 48.3%, which is higher than the company’s external guidance, primarily due to the nondeductible costs related to the agreement to resolve U.S. regulatory claims.
EBITDA in 2023 was $3.0 billion, or 8.9% of sales compared to $3.8 billion, or 13.5% of sales, a year ago. EBITDA for 2023 and 2022 included the costs noted above.
Operating cash flow for 2023 was a record inflow of $4.0 billion, compared to $2.0 billion in 2022, as Cummins continues to focus on working capital management within the business, according to a Feb. 6 release.
2024 Outlook
Based on its current forecast, Cummins projects full year 2024 revenues to decline 2% to 5% on a year-over-year basis, and EBITDA to be in the range of 14.4% and 15.4% of sales.
“In 2024, we anticipate that demand will slow particularly in the North America heavy-duty truck market, partially offset by strength in other key markets, and have already taken some actions to reduce cost. We will continue to monitor global economic indicators closely and will ensure we are prepared to adjust our business should economic momentum slow further,” Rumsey said.
“Consistent with how we have managed Cummins through prior cycles, and in alignment with our Destination Zero strategy, we will continue investment in new technologies and products in 2024. This sustained investment will ensure that the company will be positioned to generate strong growth and profitability in both the near- and long-terms,” Rumsey concluded.
For more information from Cummins’ fourth quarter and full-year 2023 fiscal report, click here.
