Cummins Inc. (CMI) Bundle
A Brief History of Cummins Inc.
Company Overview
Cummins Inc., founded in 1919, is a global leader in the design and manufacture of engines, filtration, and power generation products. The company operates in multiple segments including Engine, Distribution, Components, Power Systems, and Accelera.
Recent Financial Performance (2024)
As of September 30, 2024, Cummins reported net sales of $25.7 billion, a slight increase from $25.5 billion in the same period in 2023. The net income attributable to Cummins Inc. was $3.5 billion, or $25.31 per diluted share, compared to $2.2 billion, or $15.19 per diluted share, in the prior year, representing a significant year-over-year growth of 63%.
| Financial Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Net Sales (in billions) | $25.7 | $25.5 | $0.2 |
| Net Income (in billions) | $3.5 | $2.2 | $1.3 |
| Earnings per Share (diluted) | $25.31 | $15.19 | $10.12 |
Segment Performance
In the third quarter of 2024, the performance of various segments was as follows:
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Change (%) |
|---|---|---|---|
| Components | $2.724 billion | $3.236 billion | (16)% |
| Engine | $2.913 billion | $2.931 billion | (1)% |
| Distribution | $2.952 billion | $2.535 billion | 16% |
| Power Systems | $1.687 billion | $1.444 billion | 17% |
| Accelera | $110 million | $103 million | 7% |
Divestiture and Strategic Changes
On March 18, 2024, Cummins completed the divestiture of its remaining 80.5% ownership of Atmus, which significantly impacted the Components segment sales. This strategic decision is reflected in the sales decline of 16% in the Components segment for Q3 2024 compared to the same period in 2023.
Cash Flow and Capital Structure
For the nine months ended September 30, 2024, Cummins generated $65 million in cash from operations, a sharp decline from $2.5 billion in 2023. The company maintained a debt to capital ratio of 40.1%.
| Cash Flow Metrics | 2024 | 2023 | Change |
|---|---|---|---|
| Cash from Operations (in millions) | $65 | $2,507 | $(2,442) |
| Capital Expenditures (in millions) | $668 | $694 | $(26) |
Outlook and Future Prospects
Cummins anticipates robust demand in its medium-duty truck segment in North America and strong market potential in India. The company continues to focus on power generation markets, particularly in data center applications, which are expected to drive revenue growth in the coming quarters.
A Who Owns Cummins Inc. (CMI)
Ownership Structure
As of 2024, Cummins Inc. (CMI) has a diversified ownership structure that includes institutional investors, mutual funds, and individual shareholders. The largest shareholders include:
| Shareholder Type | Ownership Percentage | Number of Shares |
|---|---|---|
| Institutional Investors | 78.5% | 109.8 million |
| Mutual Funds | 15.2% | 21.4 million |
| Individual Investors | 6.3% | 9.0 million |
Major Institutional Shareholders
Key institutional shareholders as of 2024 include:
| Institution | Ownership Percentage | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 8.3% | 11.8 million |
| BlackRock, Inc. | 7.5% | 10.7 million |
| State Street Corporation | 5.9% | 8.4 million |
| Wellington Management Company, LLP | 4.2% | 6.0 million |
| Capital Research Global Investors | 4.0% | 5.7 million |
Recent Changes in Ownership
In 2024, Cummins completed the divestiture of its remaining 80.5% ownership of Atmus Filtration Technologies, impacting its overall equity structure. This transaction resulted in a reduction in total shares outstanding due to treasury shares reacquired in the process.
Shareholder Equity
As of September 30, 2024, the total Cummins Inc. shareholders’ equity is reported as:
| Equity Component | Amount (in millions) |
|---|---|
| Common Stock | $556 |
| Additional Paid-in Capital | $2,056 |
| Retained Earnings | $20,660 |
| Treasury Stock | $(10,783) |
| Accumulated Other Comprehensive Loss | $(2,174) |
| Total Shareholders’ Equity | $10,315 |
Stock Performance
The stock performance of Cummins Inc. in 2024 has shown significant growth. As of September 30, 2024, the diluted earnings per common share attributable to Cummins Inc. was:
| Period | EPS (Diluted) |
|---|---|
| Q3 2024 | $5.86 |
| YTD 2024 | $25.31 |
Dividends
In July 2024, the Board of Directors authorized an increase in the quarterly dividend to:
| Dividend Type | Amount per Share |
|---|---|
| Quarterly Dividend | $1.82 |
The total cash dividends paid during the nine months ended September 30, 2024, amounted to:
| Dividend Type | Total Amount (in millions) |
|---|---|
| Cash Dividends | $719 |
Cummins Inc. (CMI) Mission Statement
Mission Statement Overview
Cummins Inc. is committed to powering a more prosperous world through sustainable and innovative solutions. The company focuses on providing reliable and efficient power systems that meet the needs of its customers while minimizing environmental impact.
Financial Performance
As of September 30, 2024, Cummins reported a net income of $3.5 billion, or $25.31 per diluted share, on sales of $25.7 billion. This reflects an increase from the previous year's net income of $2.2 billion, or $15.19 per diluted share, on sales of $25.5 billion.
Sales by Segment
The following table summarizes the sales performance across Cummins’ operating segments for the nine months ended September 30, 2024:
| Operating Segment | Sales (in millions) | Percentage of Total Sales | EBITDA (in millions) |
|---|---|---|---|
| Components | $9,038 | 35% | $1,230 |
| Engine | $8,992 | 35% | $1,286 |
| Distribution | $8,316 | 33% | $978 |
| Power Systems | $4,665 | 18% | $866 |
| Accelera | $314 | 1% | ($333) |
Geographic Distribution of Sales
The following table represents Cummins' consolidated net sales by geographic area for the nine months ended September 30, 2024:
| Geographic Area | Net Sales (in millions) |
|---|---|
| United States and Canada | $15,789 |
| International | $9,866 |
Dividend and Shareholder Returns
In July 2024, Cummins' Board of Directors authorized an increase in the quarterly dividend by approximately 8%, raising it from $1.68 to $1.82 per share.
Debt and Capital Structure
As of September 30, 2024, Cummins' debt to capital ratio stood at 40.1%, a slight decrease from 40.3% at the end of 2023. The company had $2.3 billion in cash and marketable securities and access to $4.0 billion in credit facilities.
Research and Development Investments
Research, development, and engineering expenses for the nine months ended September 30, 2024, were $1.107 billion, reflecting Cummins' commitment to innovation and sustainability.
Future Outlook
Cummins anticipates continued demand for medium-duty trucks in North America and expects robust growth in its Power Systems business, particularly in power generation and mining markets.
How Cummins Inc. (CMI) Works
Company Overview
Cummins Inc. (CMI) operates as a global power leader, providing a wide range of products and services, including engines, power generation systems, and components. The company is structured into five main operating segments: Components, Engine, Distribution, Power Systems, and Accelera.
Financial Performance
For the nine months ended September 30, 2024, Cummins reported:
- Net Income: $3.5 billion, or $25.31 per diluted share
- Sales: $25.7 billion
- EBITDA: $5.3 billion
In comparison, for the same period in 2023:
- Net Income: $2.2 billion, or $15.19 per diluted share
- Sales: $25.5 billion
Segment Performance
Sales and EBITDA by operating segment for the nine months ended September 30, 2024, are summarized in the table below:
| Segment | Sales (in millions) | Total EBITDA (in millions) | Percent Change in Sales | Percent Change in EBITDA |
|---|---|---|---|---|
| Components | $9,038 | $1,230 | (12)% | (14)% |
| Engine | $8,992 | $1,286 | 1% | 1% |
| Distribution | $8,316 | $978 | 10% | 4% |
| Power Systems | $4,665 | $866 | 10% | 32% |
| Accelera | $314 | ($333) | 15% | (3)% |
| Total | $25,655 | $5,306 | 1% | 36% |
Cash Flow and Capital Structure
As of September 30, 2024:
- Cash and Marketable Securities: $2.3 billion
- Total Debt: $7.6 billion
- Debt to Capital Ratio: 40.1%
Cash flows from operations for the nine months ended September 30, 2024, generated $65 million, a decrease from $2.5 billion in the same period in 2023.
Dividends and Shareholder Returns
In July 2024, Cummins increased its quarterly dividend by approximately 8% to $1.82 per share. Total cash dividends paid during the nine months ended September 30, 2024, amounted to $719 million.
Market Presence
In terms of geographic sales distribution for the nine months ended September 30, 2024:
| Region | Sales (in millions) | Percent of Total Sales |
|---|---|---|
| United States | $14,729 | 57.5% |
| China | $2,197 | 8.6% |
| India | $1,285 | 5.0% |
| Other International | $7,444 | 29.0% |
Operational Challenges
In 2024, Cummins faced challenges such as:
- Regulatory compliance issues leading to a $1.9 billion settlement with the EPA and other entities.
- Market fluctuations affecting demand, particularly in heavy-duty truck markets in North America.
- Inflationary pressures impacting operational costs.
Research and Development
Research and development expenses for the nine months ended September 30, 2024, were $1.1 billion, representing 4.3% of total sales, slightly down from 4.5% in the previous year.
Conclusion
Cummins Inc. continues to adapt to market conditions while maintaining a robust financial structure and focusing on innovation in its product offerings.
How Cummins Inc. (CMI) Makes Money
Business Segments
Cummins Inc. operates through several key segments, which include:
- Components
- Engine
- Distribution
- Power Systems
- Accelera
Financial Performance Overview
For the nine months ended September 30, 2024, Cummins reported:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Sales | $25.7 billion | $25.5 billion | +$0.2 billion (1%) |
| Net Income | $3.5 billion | $2.2 billion | +$1.3 billion (59%) |
| Earnings per Share (Diluted) | $25.31 | $15.19 | +$10.12 (67%) |
Segment Performance
For the three months ended September 30, 2024, the performance by segment was as follows:
| Segment | Sales (in millions) | EBITDA (in millions) | Sales % of Total | EBITDA % of Total |
|---|---|---|---|---|
| Components | $2,724 | $351 | 32% | 25.3% |
| Engine | $2,913 | $427 | 35% | 30.7% |
| Distribution | $2,952 | $370 | 35% | 26.6% |
| Power Systems | $1,687 | $328 | 20% | 23.6% |
| Accelera | $110 | ($115) | 1% | -8.3% |
Revenue Sources
Cummins generates revenue through diversified products and services across multiple sectors, including:
- Power Generation: Increased demand, especially in North America and China.
- Medium-Duty Trucks: Strong sales in North America.
- Aftermarket Services: Robust demand driven by existing installed base.
Recent Developments
In 2024, Cummins completed the divestiture of Atmus, which impacted sales in the Components segment and resulted in a gain of $1.3 billion, significantly influencing the net income for the period.
Cash Flow and Capital Structure
For the nine months ended September 30, 2024, Cummins reported cash flow metrics as follows:
| Metric | 2024 | 2023 | Change |
|---|---|---|---|
| Net Cash Provided by Operating Activities | $65 million | $2.5 billion | -$2.4 billion |
| Total Debt | $7.6 billion | $6.7 billion | +$0.9 billion |
| Debt to Capital Ratio | 40.1% | 40.3% | -0.2% |
Geographic Sales Distribution
The geographic breakdown of net sales for the three months ended September 30, 2024:
| Region | Net Sales (in millions) |
|---|---|
| United States and Canada | $5,177 |
| International | $3,279 |
Future Outlook
Positive trends for Cummins include:
- Strong demand projected for medium-duty trucks in North America.
- Continued growth in power generation markets.
- Robust aftermarket services demand driven by existing installations.
Challenges include potential weakening demand in heavy-duty trucks and inflationary pressures impacting overall costs.
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Resources:
- Cummins Inc. (CMI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Cummins Inc. (CMI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Cummins Inc. (CMI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.