Cummins reports revenue of $24 billion, up 21 percent year over year for 2021
Cummins' 2021 fourth quarter financial results
Fourth quarter revenues of $5.9 billion were flat with the same quarter in 2020. Sales in North America decreased 4 percent while international revenues increased 6 percent, driven by strong demand across most global markets with the exception of China compared to the same quarter in 2020.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) in the fourth quarter were $705 million (12.1 percent of sales), compared to $837 million (14.4 percent of sales) a year ago.
Net income attributable to Cummins in the fourth quarter was $394 million compared to $501 million in 2020. The tax rate in the fourth quarter was 22.2 percent.
Cummins' full-year financial results
Revenues for the full year were $24 billion, 21 percent higher than 2020. Sales in North America increased 17 percent and international revenues increased 27 percent. Sales increased in all major regions compared to the prior year, which was severely impacted by the height of the COVID-19 pandemic.
EBITDA for the year were $3.5 billion (14.7 percent of sales) compared to $3.1 billion (15.7 percent of sales) in 2020.
The net income attributable to Cummins for the full year was $2.1 billion, compared to net income of $1.8 billion in 2020. The tax rate for 2021 was 21.3 percent.
Cummins' 2022 outlook
"Strong economic recovery combined with high demand for our products resulted in record full year revenues in 2021. Our industry continues to experience significant supply chain constraints resulting in elevated manufacturing, logistics, and material costs resulting in margins below our expectations, particularly in the fourth quarter," said Chairman and CEO Tom Linebarger. "We have taken actions to improve margins in 2022 and expect to generate strong incremental margins through increased pricing, surcharges, a number of cost reduction initiatives and operational improvements. Having effectively managed through a challenging 2021, Cummins is in a solid position to keep investing in future growth while continuing to return cash to shareholders. The transition to low carbon power across industries will be a significant driver in the fight against climate change and will require a broad mix of innovative technologies to achieve these goals. This decarbonization effort represents a significant growth opportunity for Cummins as many of our OEM partners and end customers look to achieve their climate goals, while still having power solutions that fulfill their needs. Cummins key capabilities uniquely position us to lead in the transition to zero emissions."
Based on the current forecast, Cummins projects full-year 2022 revenues to be up 6 percent, and EBITDA to be approximately 15.5 percent of sales. Cummins expects revenues to increase in all regions and major markets except China where demand is expected to moderate after a record year in 2021.