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Lower Cummins Q4 Results Follow Declines in Key Markets


kscarbel2
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Transport Topics  /  February 4, 2020

Independent engine maker Cummins Inc. reported declines in net income and revenue in the fourth quarter amid downturns in key global markets.

Net income for the period ended Dec. 31 was $300 million, or $1.97 per diluted share, on revenue of $5.57 billion. That compared with net income of $579 million, or $3.63, on revenue of $6.12 billion a year earlier. Annual profit set a record.

In the quarter, the engine segment reported on-highway revenues decreased 13%, and off-highway revenues decreased 22% primarily due to decreased global demand in truck and construction markets.

“Despite challenging conditions in many of our largest markets over the last six months, Cummins delivered record profits and operating cash flow in 2019,” Cummins Chairman and CEO Tom Linebarger said in a release.

For the full year, net income increased to $2.26 billion, or $14.48, compared with $2.14 billion, or $13.15 a year earlier.

Annual revenue dipped to $23.57 billion compared with $23.77 billion in the 2018 period.

Columbus, Ind.-based Cummins forecast 2020 revenue could decline by 8% to 12%.

The company cited as factors: lower truck production in North America, Europe, China and India as well as lower projected demand in off-highway markets, including global power generation, mining, oil and gas, and construction markets.

“The actions we have taken to reduce costs will mitigate a further slowdown in 2020 and position the company for stronger performance when market demand improves,” Linebarger added. “We will continue investment in new technologies and products in 2020 to generate strong growth and profitability for the company in both the near and long term, which is consistent with how we have managed through prior cycles.”

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