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Overview of Cummins Inc.
Cummins Inc. (NYSE: CMI) is a globally renowned power technology leader, headquartered in Columbus, Indiana, USA. The company designs, manufactures, distributes, and services a comprehensive range of power solutions, including diesel and natural gas engines, powertrain components, emission control systems, fuel systems, and electrical power generation systems. With operations in approximately 190 countries and territories through a vast network of 600 company-owned and independent distributor locations and 7,200 dealer locations, Cummins has established itself as a cornerstone in powering industries worldwide.
Core Business Areas
Cummins operates across a range of complementary business segments that cater to diverse industries such as transportation, construction, agriculture, defense, and energy. Its product portfolio includes:
- Engines: High-performance diesel and natural gas engines used in commercial trucks, off-highway machinery, and locomotives.
- Powertrain Components: Turbochargers, transmissions, aftertreatment systems, and fuel systems that enhance vehicle efficiency and performance.
- Power Generation: Standby and prime power generators, microgrid solutions, and energy storage systems for industrial and commercial use.
- Electrification and Zero-Emissions Solutions: Through its Accelera™ by Cummins brand, the company develops hydrogen fuel cells, electrolyzers, and battery-electric power systems to support the global energy transition.
Commitment to Sustainability
Cummins is at the forefront of addressing climate change through its ambitious PLANET 2050 environmental sustainability strategy and Destination Zero initiative. The company has set bold goals to reduce greenhouse gas emissions, improve energy efficiency, and transition to zero-emissions technologies. Notable achievements include:
- A 31% reduction in absolute greenhouse gas emissions from facilities compared to 2018 levels.
- Development of fuel-agnostic engine platforms and green hydrogen production technologies.
- Innovative projects like waterborne paint transitions and energy-efficient manufacturing upgrades to reduce VOC emissions and operational waste.
These efforts underscore Cummins' dual mission: enabling customer success while contributing to a more sustainable and prosperous world.
Competitive Positioning
Cummins competes in a dynamic marketplace where it often faces competition from its own customers, such as heavy-duty truck manufacturers that produce their own engines. Despite this, the company maintains a strong competitive edge through:
- Diversified Portfolio: Its broad range of products ensures it can meet the unique needs of various industries and applications.
- Technological Innovation: Cummins invests heavily in R&D, focusing on both improving traditional technologies and pioneering zero-emissions solutions.
- Global Reach: A robust distribution network and strong customer relationships across 190 countries solidify its market presence.
Future Outlook
Cummins is strategically positioned to navigate the energy transition while continuing to grow its core business. By embracing a technology-neutral approach, the company offers solutions tailored to the diverse needs of its customers, from advanced diesel engines to hydrogen-powered systems. Its investments in innovation, sustainability, and global partnerships ensure it remains a key player in the evolving power technology landscape.
Why Cummins Matters
As industries worldwide grapple with the dual challenges of meeting operational demands and achieving sustainability goals, Cummins stands out as a trusted partner. Its expertise, global presence, and commitment to innovation make it a pivotal force in powering the future of transportation, energy, and industrial applications.
Daimler Truck AG and Cummins Inc. (NYSE: CMI) have signed a framework agreement for a strategic partnership in medium-duty engines. Cummins will invest in developing a medium-duty engine platform, ceasing Daimler's own investment for Euro VII emissions compliance. Cummins will establish a local production facility in Mannheim, Germany, expected to start in the second half of the decade, ensuring job maintenance in the region. Both companies aim to improve competitiveness and explore further cooperation opportunities.
Cummins reported a 59% revenue increase to $6.1 billion in Q2 2021, with strong demand in North America (up 74%) and internationally (up 42%). Net income rose to $600 million ($4.10 per share). EBITDA for the quarter was $974 million (15.9% of sales), up from $549 million (14.3% of sales) year-over-year. The company is exploring strategic alternatives for its Filtration business. Cummins maintains a full-year revenue guidance increase of 20-24% and plans to return 75% of operating cash flow to shareholders through dividends and buybacks.
Air Products and Cummins Inc. have signed a memorandum of understanding to accelerate hydrogen fuel cell truck integration across the Americas, Europe, and Asia. Air Products plans to convert its fleet of approximately 2,000 trucks to zero-emission hydrogen fuel cell vehicles, starting with a demonstration phase set for 2022. This transition underscores Air Products' commitment to sustainability, aiming to lead the hydrogen adoption for heavy-duty applications. Both companies will work on enhancing hydrogen accessibility and infrastructure to support this initiative.
Chevron and Cummins (NYSE: CMI) have signed a memorandum of understanding (MOU) to explore a strategic alliance in the hydrogen and alternative energy sectors. The collaboration aims to promote hydrogen as a decarbonizing solution for transport and industry, develop market demand for hydrogen-powered vehicles, create necessary infrastructure, and utilize Cummins’ technologies at Chevron’s refineries. Both companies emphasize their commitment to advancing lower-carbon solutions.
Cummins (NYSE: CMI) launched the Cummins Water Works program, aiming to tackle the global water crisis through sustainable projects. With an initial investment of $8 million, the program will focus on five water-stressed countries: Mexico, Brazil, India, South Africa, and the U.S. By 2025, the initiative aims to provide fresh water access to 20 million individuals. Cummins plans to exceed its annual water use with net water benefits by 2030, and aims for water neutrality in all regions by 2050. The program partners with The Nature Conservancy and Water.org to implement impactful water projects.
The Board of Directors of Cummins (NYSE: CMI) has announced a 7% increase in its quarterly cash dividend, raising it to $1.45 per share from $1.35. This dividend will be payable on September 2, 2021, to shareholders of record by August 20, 2021. This marks the 12th consecutive year of dividend increases, reflecting the company’s commitment to returning capital to shareholders while investing in future growth. In 2020, Cummins reported $1.8 billion in earnings on $19.8 billion in sales.
Cummins (NYSE: CMI) has initiated testing of a hydrogen-fueled internal combustion engine, reinforcing its leadership in gaseous-fuel applications. This proof-of-concept aims to enhance power solutions that meet future energy demands while significantly reducing emissions. Utilizing advanced technologies, the engine promises improved power density and efficiency without the typical limitations found in diesel or natural gas conversions. Cummins is also investing in various hydrogen technologies, including fuel cells and electrolyzers, to support the decarbonization of commercial vehicles.
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