Engineering giant Cummins, which has a huge engines plant in Darlington, has reported first quarter revenues of $6.4 billion - up five per cent.

Sales in North America increased 12 percent while international revenues decreased three percent, driven primarily by a slowdown in China.

“Demand for our products remains strong across many of our key markets and regions, resulting in record revenues in the first quarter of 2022,” said Chairman and CEO Tom Linebarger.

Read more: Echo's Level Up campaign puts diversity at top of the agenda

“We have implemented pricing actions to counter rising input costs, which contributed to solid profitability in the first quarter. Supply chain constraints continue to be a challenge and are limiting growth in our industry.”

A few weeks ago, the company announced it would be investing £14m at its Darlington plant, building a new facility to test groundbreaking engine technology.

The new centre will mean Cummins - a partner in The Northern Echo's Level Up campiagn - can develop and test a wide range of power technologies, including engines to operate on green hydrogen, renewable natural gas, or sustainable diesel. Its installation and testing capability will also extend to hydrogen fuel cell and battery electric powertrains.

Ground preparation work for the new facility is now underway with the first phase expected to open for operations by May 2023.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first quarter were $755 million, compared to $980 million a year ago.

Net income attributable to Cummins in the first quarter was $418 million compared to $603 million in 2021. First quarter results include costs of $158 million related to the indefinite suspension of operations in Russia.

Based on the current forecast, Cummins is raising its full year 2022 revenue guidance to an eight per cent increase due to stronger demand in North America and other markets. Full-year 2022 EBITDA is expected to be approximately 15.5 percent, in line with our previous guidance. The company plans to return approximately 50 percent of Operating Cash Flow to shareholders in the form of dividends and share repurchases.

President and COO Jennifer Rumsey said: “We delivered solid financial performance in the first quarter in the face of many challenges in our global supply chain. The ongoing impact of COVID-19, especially in China, and the effect of the conflict in Ukraine continue to present challenges to our global operations. I am impressed with the resiliency of our employees to navigate through these difficulties and deliver for our customers. Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders.”

The company announced two significant acquisitions critical to advancing its decarbonisation goals - the acquisition of Jacobs Vehicle Systems and the intent to acquire Meritor.

JVS is a supplier of engine braking, cylinder deactivation, start and stop and thermal management technologies which are key components to meeting current and future emissions regulations.

The integration of Meritor, a global leader of drivetrain, mobility, braking, aftermarket and electric powertrain solutions for commercial vehicle and industrial markets will position Cummins as one of the few companies able to provide integrated powertrain solutions across combustion as well as electric power applications.

Cummins was named one of the World’s Most Ethical Companies for a 15th consecutive time by Ethisphere, a global leader in defining and advancing the standards of ethical business practices. The company was also named on the Barron’s 100 Most Sustainable US Companies list, and received a perfect score on the Human Rights Campaign’s 2022 Corporate Equality Index for the 18th consecutive year.

The company also hosted its biennial analyst day highlighting its decarbonisation strategy, Destination Zero, which includes making meaningful reductions in carbon emissions through advanced internal combustion technologies widely accepted by the market today, while continuing to invest in and advance zero emission technologies ahead of widespread market adoption.

In February, Cummins unveiled the industry’s first unified, fuel-agnostic internal combustion powertrain platforms, which will be applied across Cummins’ X-Series, L-Series and B-Series product platforms, and helps fleets reduce carbon emissions by enabling vehicles to run on low to zero carbon fuels.

The platform utilises the internal combustion engine technology that fleets are already familiar with while also applying a high level of shared parts and integration across fuels including diesel, natural gas, hydrogen or other fuel applications.

The New Power business continued to expand its green hydrogen presence globally. In North America, Florida Power & Light Company announced Cummins will supply a 25-megawatt electrolyser system for the groundbreaking FPL Cavendish NextGen Hydrogen Hub – Florida’s first of its kind “green” hydrogen plant. The Hub will leverage solar energy to power the electrolysis process that produces green hydrogen from water.

 

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