Led by strong demand for trucks, construction and mining equipment, Cummins Inc. reported results for the first quarter of 2018. The Columbus, Ind. manufacturer announced that first quarter revenues of $5.6 billion increased 21 percent from the same quarter in 2017. Currency favorably impacted revenues by 2 percent, primarily due to a weaker US dollar.
Based on the current forecast, Cummins expects full year 2018 revenues to be up 10 to 14 percent, compared to prior guidance of up 4 to 8 percent.
Sales in North America improved by 22 percent while international revenues increased by 20 percent led by strong growth in Europe, Latin America, China and India. “Improving demand in a number of the company’s core markets, combined with our strong global market share and the success of new products aimed at lowering emissions, resulted in sales growth of 21 percent in the first quarter,” said Chairman and CEO Tom Linebarger.
During the first quarter, Cummins said it recorded a pre-tax charge of $187 million for the expected costs of a product campaign. This campaign is part of a proactive plan to address the performance of an aftertreatment component in certain on-highway products produced between 2010 and 2015 in North America. Cummins said it is in the process of finalizing the details of the campaign and, as is customary, the campaign is subject to regulatory approval.
For the engine segment, sales for the quarter were $2.4 billion, up 21 percent. Cummins said on-highway revenues increased 20 percent, and off-highway revenues increased 23 percent primarily due to increased global demand in truck and construction markets. Cummins also said the new Cummins Westport ISX12N engine, manufactured at the Jamestown Engine Plant, became the world’s first class 8 on-highway truck engine certified by the California Air Resources Board to their near-zero emissions standard.
In its distribution segment, sales were $1.9 billion, up 13 percent, with revenues in North America increasing by 15 percent and in international markets by 8 percent.
In Cummins components business, sales were $1.8 billion, up 30 percent. The Eaton Cummins Automated Transmission joint venture recorded sales of $117 million and an EBITDA loss of $3 million in the first quarter. Revenues in North America increased by 35 percent, and international sales grew by 25 percent due to higher commercial truck production in North America as well as additional content in India with the introduction of Bharat Stage IV in 2017 and a weak U.S. dollar
For Power Systems, sales were $1.1 billion, up 22 percent due to increased demand in mining, oil and gas and power generation markets drove the growth in sales
Finally, Cummins new electrified power segment had sales of $2 million and a segment EBITDA loss of $10 million.