U.S. truck engine maker Cummins Inc on Thursday beat second-quarter estimates and forecast improved revenue margins boosted by demand in the power generation market, sending its shares up 4.6% in early trading.
Better than expected demand for the company’s industrial applications, particularly in the mining sector, drove up sales for its power systems segment by 9% to $1.6 billion in the quarter.
The company has also been implementing cost-cutting actions to counter waning demand for heavy-duty trucks in key regions including North America as well as slow export demand in China.
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“We still expect slowing demand in the North America heavy-duty truck market in the second half of the year” said CEO Jennifer Rumsey in a statement.
Cummins has been actively investing in fuel cell and hydrogen production technology as consumers steer towards greener products.
In July, Brazilian miner Vale announced a partnership with Japan’s Komatsu and Cummins to develop low-emission haul trucks.
Cummins now expects its full-year revenue to be down 3% to flat compared to the previous expectation of a 2% to 5% decline.
Cummins also raised its EBITDA growth expectations for 2024 to 15.0% to 15.5% from 14.5% to 15.5% estimates earlier.
The Indiana-based company reported earnings per share of $5.26 for the quarter ended June 30, well above analysts’ estimates of $4.81 per share.
It also reported revenue of $8.8 billion, beating estimates of $8.34 billion.
