Third-quarter revenues of $6.0 billion increased 17 percent from the same quarter in 2020. Sales in North America increased 13 percent while international revenues increased 22 percent driven by strong demand across all global markets outside of China compared to the same quarter in 2020.
“Demand remained strong in the third quarter as the global economy continued to improve, driving strong sales growth across most businesses and regions outside of China, which is moderating in line with expectations,”
said Chairman and CEO, Tom Linebarger.
“Economic trends such as order activity, freight rates, and used equipment prices remain robust across a number of our key end markets which points to strong demand extending into 2022 and beyond. Cummins is well-positioned to benefit as these markets gain momentum as we continue to see orders for our products outpace our competition. Despite this strong demand, supply chain constraints continue to impact our business as well as our customers, resulting in rising material costs, elevated logistics expenses, and other manufacturing inefficiencies and capping revenue below our expectations three months ago.”
Earnings before interest, taxes, depreciation, and amortization (EBITDA) in the third quarter was $862 million (14.4 percent of sales), compared to $876 million (17.1 percent of sales) a year ago.
Net income attributable to Cummins in the third quarter was $534 million ($3.69 per diluted share) compared to $501 million ($3.36 per diluted share) in 2020. The tax rate in the third quarter was 19.9 percent including $11 million, or $0.08 per share, of favorable discrete items.
Based on the current forecast, Cummins is lowering its full-year 2021 revenue guidance to be up approximately 20 percent versus last year, compared to prior guidance of up 20 to 24 percent. EBITDA is now expected to be approximately 15.0 percent compared to the previous guidance of 15.5 to 16.0 percent of sales due to the ongoing supply chain challenges in our industry. The Company expects to return over 75 percent of Operating Cash Flow to shareholders in 2021 in the form of dividends and share repurchases.
Any expenses outside of the normal course of business associated with the evaluation of strategic alternatives for the Filtration business have been excluded from the outlook provided.
Third Quarter 2021 Highlights:
- Cummins announced that it will bring to market a 15-liter natural gas engine for heavy-duty trucks. The 15-liter natural gas engine is an important part of Cummins’s strategy for its path to zero emissions. The strategy focuses on new powertrains including advanced diesel, natural gas, hydrogen engines, hybrids, battery-electric, and fuel cells along with increased use of low carbon fuels and renewable electricity and related infrastructure. The expanding product lineup will help achieve Cummins’ PLANET 2050 environmental goals which include lowering emissions from newly sold products by 30% by 2030 and a goal of carbon neutrality by 2050, aligned with the Paris Climate Accord targets.
- The company announced it will launch a set of software features to integrate its powertrains with Automated Driving System (ADS) technologies. Cummins is a market leader in delivering powertrains that provide leading performance and fuel economy through the integration of hardware and software. With these new software features, Cummins will extend these core capabilities into the ADS space as well. Cummins is positioned to be a leader in ADS technology integration globally and is actively testing more than 100 vehicles in coordination with ADS technology companies to ensure seamless powertrain integration as ADS solutions enter commercial vehicle markets globally.
- Cummins received two awards, totaling nearly $7 million, from the US Department of Energy for continued work on enhancing the economic viability of fuel cell powertrain solutions for heavy-duty applications, including on-highway tractor-trailers and buses. The program will drive the scale and investment needed to allow for faster adoption of hydrogen fuel cell technologies.
- The company launched Cummins Water Works, a community-focused initiative to address the global water crisis around the world by bringing fresh water to 20 million people who would otherwise not have access to it. The program will partner with leading water experts and the Water Resilience Coalition to invest in sustainable, large-scale, high-impact projects in water-stressed regions.
- The company administered over 30,000 vaccine doses in India, continuing its commitment to the safety of employees, joint venture partners, and suppliers, and their families during the COVID-19 pandemic.
- The company announced an increase in its quarterly dividend from $1.35 to $1.45 a share.