Off-road and on-road engine manufacturer Cummins made first quarter revenues of US$6.1bn, a 22% increase on the same quarter in 2020.
Sales in North America increased 7% while international revenues increased 45%, which the US company said was driven by strong demand across all global markets as well as new product sales in China and India.
“Demand accelerated in the first quarter, as the global economy continued to improve, driving strong sales growth across most businesses and regions and resulting in solid profitability,” said chairman and CEO Tom Linebarger. “The strength and breadth of the rebound in demand has surpassed our original expectations and we have raised our full year outlook.”
Linebarger added that while the company is encouraged by the rising demand, the pace of recovery has placed a strain on global supply chains leading to increased costs and challenges in fulfilling end-user demand.
“The shortage of key components such as semiconductor chips has been the primary challenge, with adverse weather conditions impacting the US, and bottlenecks in global logistics further adding to order backlogs,” he said. “The ability to supply is our key focus now and we are doing everything we can to mitigate the impact. I want to thank our global employees, especially those in our supply chain and manufacturing operations, and our suppliers for their extraordinary efforts to manage through these challenges and support our customers.”
Eric Neal, executive director of Cummins off-highway, said that demand in off-highway markets around the globe continues to be strong. “Supply chain issues remain our biggest challenge in further growth,” added Neal.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) in Q1 were US$980m (16.1% of sales), compared to US$846m (16.9% of sales) a year ago.
Net income attributable to Cummins in Q1 was US$603m (US$4.07 per diluted share) compared to US$511m (US$3.41 per diluted share) in 2020.
Based on the current forecast, Cummins is raising its full year 2021 revenue guidance to 20 to 24%, an increase from 8 to 12% due to stronger demand across all markets. EBITDA is expected to be in the range of 15.5 to 16.0%, an increase from the prior range of 15.0 and 15.5% of sales, primarily due to increased demand.
“We are raising our guidance for 2021 on both revenue and profitability,” said Linebarger.
“Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders.”
