EUR 850.00 For Business Accounts Only

Morningstar | CMI Updated Forecasts and Estimates from 08 Jul 2019

For nearly the past 100 years, Cummins has designed and manufactured industry-leading engines and developed a brand known for reliability and durability. Today, Cummins consists of four primary segments: engines (35% of 2018 revenue), components (24%), distribution (26%), and power systems (15%). As of 2018, Cummins began reporting a fifth segment, electrified power systems, which accounts for less than 0.1% of sales.Over the past decade, Cummins’ engine and component segments have taken advantage of both rising fuel-efficiency standards and emissions-reduction regulations. Cummins’ engines are primarily used in heavy-duty trucks, but its equipment is distributed across various industries, such as mining and defense. As engine technology requirements have strengthened, so has Cummins’ market share: Cummins has grown North American heavy-duty engine market share from 22% in 2006 to 38% in 2018. Supporting its engine equipment is the component segment, which manufactures products used for turbo-technologies, filtration, and fuel systems. This segment leverages Cummins’ leading engine position for specialized ancillary equipment, where operating margins are a robust 12%. Cummins’ prowess in the component business is demonstrated by the fact that it is both a leading supplier of aftertreatment products for commercial vehicles and the largest global supplier of turbochargers for commercial applications.The power generation segment manufactures standby and mobile power generation for operations that require an uninterrupted supply of power, such as hospitals and data centers. The division is a significant internal consumer of the engine division’s products, increasing the company’s manufacturing scale and design expertise.Distribution is a key partner to all of Cummins’ business units. The division provides its customers with both worldwide access and world-class aftersales support through its 7,600 dealers in more than 190 countries. Like other successful equipment companies, Cummins’ control of distribution is key to managing brand perception and thus to maximizing its intangible asset moat source.