- Cummins Inc (NYSE: CMI) reported fourth-quarter sales growth of 32.8% year-over-year to $7.77 billion, beating the consensus of $7.21 billion.
- Excluding the contribution of the Meritor business acquisition, Q4 revenues were $6.6 billion, up 13% Y/Y.
- Adjusted EPS of $4.52 missed the consensus of $4.56.
- Sales in North America increased by 25% and international decreased by 1%, as strong demand across all global markets was offset by a market slowdown in China, and Russia, where it indefinitely suspended operations.
- Sales by segments: Engine $2.6 billion (+9% Y/Y), Distribution $2.3 billion (+13% Y/Y), Components $3.1 billion (13% Y/Y), Power Systems $1.3 billion (+22% Y/Y), and New Power $75 million (+79% Y/Y).
- Cummins generated an operating cash flow of $817 million, compared to $732 million a year ago.
- The EBITDA margin expanded by 210 bps to 14.2%.
- “In 2023, we anticipate that demand will remain strong in most of our key regions and markets, especially in the first half of the year. We will continue monitoring global economic indicators closely and ensure we are prepared should economic momentum slow further,” CEO Jennifer Rumsey said. “We expect revenue growth and margin expansion in our core business and strong growth in our New Power segment in 2023.”
- FY23 Outlook: Cummins expects revenue growth of 12% – 17%.
- Price Action: CMI shares are trading lower by 1.4% at $252.70 at the last check Monday.
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