Cummins delivered solid profitability in QQ3 2024 despite a modest top-line backdrop. Revenue stood at $8.456 billion, up 0.3% year over year but down 3.9% quarter over quarter, reflecting continued cyclicality in certain end-markets. Gross profit of $2.171 billion produced a gross margin of 25.7%, while operating income of $1.05 billion yielded an operating margin of 11.5%, and net income of $809 million translated to a net margin of 9.6%. Diluted EPS reached $5.86, with reported EPS of $5.90, underscoring earnings leverage from manufacturing efficiency and cost discipline. Cash flow remained healthy, delivering $640 million from operations and $381 million in free cash flow, supported by $259 million of capital expenditure and $250 million in dividends paid during the quarter.
The balance sheet remains solid with total assets of $32.05 billion and total liabilities of $20.71 billion. Net debt stood at $6.38 billion, while liquidity remained ample with cash and short-term investments of $2.25 billion and cash on hand of $1.733 billion at quarter-end. Key balance sheet metrics point to a prudent capital structure (debt-to-capitalization of 0.424 and interest coverage of ~11.7x), providing financial flexibility to fund ongoing investments in core engine platforms, components, and electrified power initiatives.
Looking ahead, Cummins continues to pursue opportunities across its diversified product portfolio, including traditional internal combustion engines, power generation, components, and electrified power systems (New Power). The company’s cash flow strength supports its dividend policy and strategic investments in aftermarket services and electrification, which are critical to sustaining long-term growth. The absence of explicit QQ3 guidance in the provided data necessitates a cautious stance; the investment thesis rests on managed cost structure, stable end-market demand, and a disciplined capital allocation framework. Investors should monitor end-market strength in trucking, construction, and industrial applications, currency dynamics, input costs, and progress in electrified power solutions and aftermarket growth.