It’s an other record for Cummins during second quarter 2023. Revenues of $8.6 billion increased 31% from the same quarter in 2022. Sales in North America increased 31% and international revenues increased 32% due to the addition of Meritor and strong demand across most global markets.
Net income attributable to Cummins in the second quarter was $720 million, or $5.05 per diluted share compared to $702 million, or $4.94 per diluted share in 2022. Results included costs associated with the separation of Atmus of $23 million, or $0.13 per diluted share, in the second quarter of 2023, and $29 million, or $0.16 per diluted share, in the second quarter of 2022. The second quarter of 2022 also included $47 million, or $0.33 per diluted share, of benefit from adjusting the reserves related to the indefinite suspension of our operations in Russia. The tax rate in the second quarter was 22.3 percent including $3 million, or $0.02 per diluted share, of unfavorable discrete tax items.
Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.3 billion, or 15.1% of sales, compared to $1.1 billion, or 16.0 percent of sales, a year ago. EBITDA for the second quarter of 2023 included the costs related to the separation of Atmus and the second quarter 2022 EBITDA included the reserve release related to the indefinite suspension of operations in Russia and costs related to the separation of Atmus as noted above. EBITDA percentage decreased in the second quarter principally due to the dilutive impact of Meritor, which currently has a lower gross margin percentage than our company average.
Jennifer Rumsey about Cummins second quarter 2023
“Strong demand across most of our key markets and regions resulted in record revenues and solid profitability for the company in the second quarter of 2023,” said Jennifer Rumsey, Chair and CEO. “We are committed to delivering cycle-over-cycle improvement in financial performance, returning cash to our shareholders and prioritizing investments to continue building our product portfolio to power our customers’ success around the world. I want to thank our Cummins employees who continue to work tirelessly to meet customer needs and respond to the strong demand levels by ensuring quality products, strengthening our customer relationships, and navigating continued supply chain constraints.”
And what about the second quarter?
Based on its current forecast, Cummins is maintaining its full year 2023 revenue guidance to be up 15 to 20 percent due to strong demand across most markets, especially North America. EBITDA is still expected to be in the range of 15.0 to 15.7% of sales. The outlook above includes the projected results of the Meritor business for 2023. The outlook assumes the inclusion of Atmus for the entirety of 2023, but excludes any costs or benefits associated with the planned separation of the business. Within the Components Segment, Cummins expects revenues of the Meritor business for 2023 to be between $4.7 billion to $4.9 billion and EBITDA to be in the range of 10.3% to 11.0% of sales, consistent with prior guidance. The company plans to continue to generate strong operating cash flow and returns for shareholders and is committed to our long-term strategic goal of returning 50% of operating cash flow back to shareholders. In the near term, we will focus on reinvesting for profitable growth, advancing dividends and reducing debt.
“While we see demand remaining strong through 2023 and we are maintaining our guidance on revenue and profitability, we continue to closely monitor global economic indicators. Should economic momentum slow, Cummins will remain in a strong position to keep investing in future growth, bringing new technologies to customers as we advance our Destination Zero strategy, and returning cash to shareholders,” said Rumsey.