OBSEERVER Photo by Christopher Blakeslee
Shawn Hricko, Cummins Jamestown Engine Plant manager, is pictured with Jennifer Rumsey, Cummins CEO, during a recent 50th anniversary event at the plant in Busti.
Cummins Inc.’s Jamestown Engine Plant just produced the most heavy-duty engines in one three-month period in its 50-year history.
Cummins officials recently reported the company’s second quarter financial results, and one note was the second quarter production at the company’s plant located in Busti. Production of heavy-duty trucks in the second quarter were 75,000 units, a 1% increase from 2023 levels, while heavy-duty engine sales of 31,000 were a 7% increase from a year ago.
That’s good news, but Cummins officials foresee a softening of the heavy-duty truck market coming.
“So in terms of the heavy-duty demand, we all wish we had a crystal ball that could project how this is going to play out,” said Jennifer Rumsey, Cummins CEO, in response to a question from investor analysts. “This cycle has been very different than past cycles because of the pent-up demand that we had seen and then, of course, getting into pre-buy expectations. So it’s really difficult to predict at what point next year we’ll start to see improvement and economic conditions will certainly play a role in that. So I’m not going to project exactly when, but I think at some point in next year, we’ll see recovery. And we’ve taken the steps to be prepared for that softening over the next few quarters.”
Second-quarter revenues of $8.8 billion increased 2% from the same quarter in 2023. Sales in North America increased 4% while international revenues decreased 2%. Net income attributable to Cummins in the second quarter was $726 million compared to $720 million in 2023. Based on its current forecast, Cummins is raising its full-year 2024 revenue guidance, which was expected to decrease 3%, to now be the same as 2023 thanks to stronger than expected demand across several markets, especially in North America on-highway and power generation.
“While we anticipate softening in the North America heavy-duty market in the second half of the year, demand in several of our core markets remain strong. Should economic momentum slow, Cummins is in a strong position to keep investing in future growth, bringing new technologies to customers and returning cash to shareholders. … In summary, we had a strong performance in the first half of 2024, driven by record demand for Cummins products in our core markets. It is exciting to see our business grow with long-established customers in existing markets and to see newer partnerships yield additional opportunities in previously untapped markets for Cummins. I’m grateful for our employees who continue to execute on our strategy and deliver solutions that help our customers win wherever they operate.”
Accelera by Cummins, Daimler Trucks & Buses and PACCAR completed the formation of a joint venture during the second quarter. The venture will be known as Amplify Cell Technologies and will localize battery cell production and the battery supply chain in the United States. This strategic collaboration will advance zero-emissions technology for electric commercial vehicles and industrial applications. Amplify began construction of a 21-gigawatt hour (GWh) factory in Marshall County, Miss., with potential for further expansion as demand grows. The factory is expected to create more than 2,000 U.S. manufacturing jobs and is targeting the start of production in 2027.
Cummins and Isuzu announced the launch of a new 6.7-liter engine designed for use in Isuzu’s new medium-duty truck lineup. The “Isuzu DB6A” will power on-highway truck applications built for the Japanese market and will be available for the Asia Pacific markets and other global markets later this year. Cummins also announced plans to launch a battery electric powertrain for Isuzu’s F-series in North America. Availability of the medium-duty truck is expected in 2026 and will include Accelera’s next generation lithium iron phosphate (LFP) battery technology.
The investment in medium-duty markets, illustrated by the Isuzu deal as well as the decision by Daimler to transition to Cummins engines, is one reason the company is bullish on its engine business even as the heavy-duty engine market appears to be softening.
“But as we mentioned earlier, the demand for medium duty is getting stronger,” said Mark Smith, Cummins chief financial officer. “We’re actually investing to raise capacity over time, partly because of the strength of the market part because of the new business we’ve won. So right now, the expectation is that less volatility and a sustained high demand is what we’re being told right now. Things can change based on the economy. But there’s more question marks about heavy. Clearly, it’s going down in the near-term and a lot less questions about medium duty for now.”