01—Abstract
Summary
Summary of the 10-K filed February 11, 2025. Cited figures are marked; the original filing is the authoritative source.
Cummins Inc. reported stable net sales of $34.1 billiona for the year ended December 31, 2024, with net income attributable to Cummins Inc. reaching $3.9 billion.
This significant increase in net income compared to the prior year was primarily driven by the absence of a $2.0 billionb charge related to emissions settlement agreements and a $1.3 billion gain recognized from the divestiture of its remaining stake in Atmus Filtration Technologies. The company experienced strong performance in its Distribution and Power Systems segments, with sales increasing by 11% and 13% respectively, largely due to robust demand in power generation markets. However, the Components segment saw a 13% decline in sales, primarily due to the divestiture of Atmus.
The Engine segment's sales remained flat, impacted by mixed demand across different truck markets and weaker off-highway sales. The Accelera segment reported a strategic reorganization, leading to $312 millionc in charges, while sales saw a modest increase. Looking ahead to 2025, Cummins anticipates continued strength in Power Systems and the Indian truck market, alongside an expected improvement in North American pick-up truck demand.
However, challenges remain with expected weakness in North American medium-duty and heavy-duty truck markets in the first half of the year, along with ongoing cost pressures. The company maintained a strong financial position with a debt-to-capital ratio of 38.4% and generated $1.5 billiond in operating cash flows. Cummins also increased its quarterly dividend by approximately 8%.
02—Key points
Key Highlights
- Net sales remained stable at $34.1 billion for fiscal year 2024.
- Net income attributable to Cummins Inc. significantly increased to $3.9 billion, largely due to the absence of the 2023 settlement agreement charge and a gain from the Atmus divestiture.
- Distribution and Power Systems segments showed strong sales growth (11% and 13% respectively), driven by power generation demand.
- Components segment sales declined 13% primarily due to the divestiture of Atmus.
- Accelera segment incurred $312 million in strategic reorganization charges but saw a modest sales increase.
- Operating cash flow was $1.5 billion, and the company maintained a solid financial position with a debt-to-capital ratio of 38.4%.
- Quarterly dividend increased by approximately 8%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, Cummins Inc kept $0.12.
- Revenue$34.10B100.0%
- Cost of revenue−$25.66B75.3%
- Gross profit$8.44B24.7%
- Operating costs−$4.69B13.7%
- Operating income$3.75B11.0%
- Interest, other & tax$196.0M0.6%
- Net income$3.95B11.6%
Where FY2024 revenue went
$34.10B- Cost of revenue: $25.66B, 75% of revenue
- Operating income: $3.75B, 11% of revenue
- R&D: $1.46B, 4.3% of revenue
- SG&A: $3.27B, 9.6% of revenue
Kept 11% as operating incomeOperating income $3.75B · 11%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 11, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $34.10B$34.06B | +0.1% |
| Cost of Revenue | $25.66B$25.82B | −0.6% |
| Gross Profit | $8.44B$8.25B | +2.3% |
| R&D Expenses | $1.46B$1.50B | −2.5% |
| SG&A Expenses | $3.27B$3.33B | −1.7% |
| Operating Income | $3.75B$1.76B | +112.9% |
| Interest Expense | $370.00M$375.00M | −1.3% |
| Net Income | $3.95B$735.00M | +436.9% |
| EPS (Basic) | $28.55$5.19 | +450.1% |
| EPS (Diluted) | $28.37$5.15 | +450.9% |
| Shares Outstanding (Basic) | 138.20M141.70M | −2.5% |
| Shares Outstanding (Diluted) | 139.10M142.70M | −2.5% |
05—Questions
Frequently Asked Questions
What were the primary drivers for the significant increase in net income in 2024 compared to 2023?
The substantial increase in net income was primarily driven by two factors: the absence of a significant $2.0 billion charge related to emissions settlement agreements recorded in 2023, and a $1.3 billion gain recognized from the divestiture of Cummins' remaining stake in Atmus Filtration Technologies in 2024.
How did the divestiture of Atmus Filtration Technologies impact the company's financial results?
The divestiture of Atmus, completed on March 18, 2024, resulted in a $1.3 billion gain recognized in 'Other income, net.' The absence of Atmus's operations also led to a decrease in Components segment sales by 13% and contributed to the overall flat net sales for the year.
What is the outlook for Cummins in 2025, and what are the key challenges?
For 2025, Cummins expects strong demand in its Power Systems business and the Indian truck market, with an anticipated improvement in North American pick-up truck demand. Key challenges include expected weakness in North American medium-duty and heavy-duty truck markets in the first half of the year, alongside ongoing cost pressures and potential trade disruptions.
How did the Accelera segment perform, and what are the implications of the strategic reorganization?
The Accelera segment experienced a strategic review in the fourth quarter of 2024, leading to $312 million in charges for inventory write-downs, asset impairments, and joint venture impairments. While sales saw a modest increase, the reorganization reflects a recalibration of investments due to a slowdown in zero-emission solution adoption. This segment continues to be in the early stages of commercialization.
06—Continue