Clean Air settlement takes wind out of Cummins’ earnings

COLUMBUS, Ind. (WISH) — New numbers from Indiana-based Cummins reflect a year of strong successes blunted by a historic settlement.

The company’s earnings report for 2023 and the year’s final quarter starts with the positive news: $34.1 billion in revenue for the year – a 21% boost from 2022.

But when a massive settlement with the federal government is removed from the bottom line, the results are considerably less rosy. The $1.675 billion agreement settles claims that Cummins intentionally installed devices on heavy-duty Ram pickups meant to defeat emissions tests. The Justice Department says it is the largest penalty ever for a Clean Air Act violation.

With the settlement subtracted from the year’s numbers, Cummins cleared $735-million in profits, or about one-third of the $2.2-billion profit of 2022.

In closing out the 2023 ledger, Cummins is also giving a first forecast for the year ahead. The company warns that it expects slower demand in 2024, driven in part by what analysts expect to be a slowdown in heavy-duty truck sales in North America.

The anticipated slowdown has fueled preemptive steps to cut costs, including offering voluntary buyouts and separation packages for some salaried workers.

Despite the 2023 headwinds, company leaders are delivering a resolute message for the months to come.

“Consistent with how we have managed Cummins through prior cycles, and in alignment with our Destination Zero strategy (the company’s carbon emissions plan), we will continue investment in new technologies and products in 2024′” Cummins CEO and Chair Jennifer Rumsey said in a release. “This sustained investment will ensure that the company will be positioned to generate strong growth and profitability in both the near- and long-terms.”

Between its Columbus and Indianapolis headquarters and various other facilities around the state, Cummins is one of the largest companies based in the state, with roughly 76,000 employees, including 10,000 in Indiana.