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Cummins Inc. It delivered better-than-expected earnings results for last year’s fourth quarter and overall 2022.
The results left market watchers optimistic, and even if you don’t own stock in Cumbis, the company’s performance is a powerful driver and barometer of our region’s economy.
The Republic’s Andy East reported Tuesday on Columbus-based Cummins’ gangbusters fourth quarter. Corporate revenue for October through December was $7.77 billion, up from $5.8 billion in the same quarter in 2021 and beating Bloomberg estimates of $7.24 billion. Net sales rose 32.8 percent.
“Book it as a solid quarter,” said Craig Kessler, president and chief investment officer of Columbus-based Kessler Investment Group, after the company released earnings. “It’s pretty good for the rest of this year, and I think it’s going to continue to be the normal path that we’ve all come to realize here in Columbus since the Covid. I think they are moving in the right direction, and we should all feel confident and proud of what Cummins has delivered.
We can’t get over that feeling, but in reading what Cummins and market experts had to say about the quarterly and annual earnings reports, two things stood out.
The company continues to accelerate its transition to a zero-emission and carbon-free future under the first year of leadership from CEO Jennifer Ramsey. That strategy and vision, followed by a seamless transition in leadership, is paying real dividends.
But that doesn’t mean Cummins’ core business isn’t growing. Quarterly and year-over-year revenue increased in every line of business, the company reported. This is an impressive feat in a global environment still reeling from the remnants of the pandemic, supply chain disruptions, the end of trade with Russia and declining demand from China.
Cummins has pursued business as usual through all those challenges, and the results — including record revenue last year — benefit the entire community and region.
“We’ve done this by focusing on the exciting opportunity ahead of us to lead the industry toward a broader clean economy and do it in a way that’s good for our stakeholders and the planet,” Ramsey said. “Decarbonisation is an opportunity for growth… unifying our business and climate goals.
And in this regard, numbers also tell a story.
While the new power segment is a small fraction of Cummins’ overall bottom line, its share is growing exponentially. This segment, which focuses on hydrogen and carbon-free systems, is forecasting a 70% increase in revenue in 2022 and a 120% increase in the fourth quarter compared to 2021.
Roger Lee, senior research analyst at Kirr, Marbach & Co. in Columbus, told Eastern that Cummins’ outlook for this year is strong.
“They are looking for 12 percent to 17 percent growth, and 2022 is not a bad year,” Lee said. They have made it clear that the core market will be very strong for the first half of the year.
That’s good news for Cummins, its employees and the communities in which it does business, including Seymour. The market likes the company’s direction. One final figure proves it: According to this week’s earnings report, Cummins’ stock price is up nearly 30 percent over the past six months.
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