Cummins’ earnings are negatively impacted by the Clean Air settlement

Columbus, Indiana – Cummins, a company located in Indiana, has released new figures that show how a historic settlement tempered a year of notable performance.

The good news begins with the company’s earnings report for 2023 and the last quarter of the year: $34.1 billion in revenue for the year, up 21% from 2022.

However, the picture is far less bright when a sizable settlement with the federal government is taken out of the equation. Claims that Cummins purposefully fitted devices on heavy-duty Ram pickup trucks to evade emissions testing have been resolved by the $1.675 billion deal. It is the biggest fine for a Clean Air Act violation ever, according to the Justice Department.

Cummins cleared $735 million in profits after deducting the settlement from the year’s figures, or roughly one-third of the $ 2.2 billion profit in 2022.

As Cummins wraps out the 2023 ledger, it also provides an initial projection for the upcoming year. The company issued a warning, stating that it anticipates weaker demand in 2024, partly due to what analysts predict would be a slowdown in North American sales of heavy-duty trucks.

Preemptive measures to reduce expenses, such as providing voluntary buyouts and separation packages for some salaried employees, have been spurred by the predicted downturn.

Company executives are sending a strong message for the upcoming months despite the challenges of 2023.

“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.”

With around 76,000 people, including 10,000 in Indiana, Cummins is one of the largest firms based in the state, with headquarters located in Columbus, Indianapolis, and several other locations throughout the state.