Cummins has reported results for the first quarter of 2020, showing revenues of $5 billion, decreased 17 percent from the same quarter in 2019. Lower truck production in North America and weaker demand in global construction, mining, and power generation markets drove the majority of the revenue decrease. Currency negatively impacted revenues by 1 percent primarily due to a stronger U.S. dollar.
Sales in North America declined by 16 percent while international revenues decreased by 17 percent led by declines in Europe, Asia Pacific, Latin America, India, and China.
Earnings before interest, taxes, depreciation and amortization in the first quarter were $846 million (16.9 percent of sales), compared to $1 billion (17.2 percent of sales) a year ago.
Net income attributable to Cummins in the first quarter was $511 million, compared to $663 million in 2019. First quarter net income included a benefit of $35 million, resulting from recent changes to tax law in India. The tax rate in the first quarter was 19.4 percent.
“We delivered strong profitability in the first quarter, supported by the commitment of our employees to serve our customers and the benefit of cost reduction actions we initiated in the second half of 2019,” said CEO Tom Linebarger. “Amidst the unprecedented COVID-19 pandemic, the health and safety of our employees and the communities in which we operate is our top priority. Our teams are working hard to support the global economy, leveraging our flexibility and strong supplier network to help our customers deliver essential products and support response efforts. Given the significant impact the pandemic will have on demand across our industry in the second quarter and beyond, we are continuing to take actions to reduce cost and boost our already strong liquidity.”
Sales in the engine segment were $2.2 billion, down 19 percent from the same period last year. On-highway revenues decreased 17 percent and off-highway revenues decreased 23 percent, primarily due to decreased global demand in truck and construction markets.
Other first quarter highlights include:
Cummins Foundation issued grants to community partners addressing urgent childcare, nutrition and remote learning needs caused by COVID-19 crisis.
Announced partnerships with DuPont and 3M to provide critical material for N95 masks and powered air purifying respirators.
The Human Rights Campaign (HRC) announced that Cummins received a perfect score for a 15th consecutive year in its corporate equality index.
Cummins was named to Ethisphere’s list of the World’s Most Ethical Companies for a 13th consecutive year.
“During our 100-year history, we have encountered several unforeseen crises, and I am confident we will successfully navigate this one as we have done before, to emerge stronger,” said Linebarger. “Cummins enters this period of uncertainty in a position of strength with an experienced leadership team that has led through multiple cycles and a strong balance sheet. Our deep customer and supplier relationships combined with our leading positions in global markets leave us well positioned to deliver strong growth when the global economy recovers.”
Due to uncertainty related to the coronavirus pandemic, the company is not providing revenue or profitability guidance for 2020.