Cummins, the power systems company, experienced a loss in the fourth quarter of last year as a result of its billion-dollar settlement with the U.S. government. Despite this setback, the company saw a 10% increase in sales during the quarter.
The loss amounted to $1.43 billion, or $10.01 per share, in comparison to a profit of $631 million, or $4.43 per share, in the same quarter of the previous year. Analysts had predicted earnings of $4.45 per share. This net loss included a $2.04 billion charge from the settlement reached with the federal government in December. The settlement involved claims that Cummins had installed devices in hundreds of thousands of engines that bypassed emission-control sensors.
In terms of revenue, the company reported quarterly revenue of $8.54 billion, up from $7.77 billion the previous year. This exceeded the consensus estimate of $8.1 billion from analysts surveyed by FactSet.
While sales in North America increased by 8%, international revenues grew by 13% due to strong demand across global markets.
Looking ahead, Cummins expects a decline in revenue of 2% to 5% this year. This is primarily due to slowing demand in the North America heavy-duty truck market. However, the company anticipates some offsetting strength in other key markets.
Chief Executive Jennifer Rumsey emphasized the need to closely monitor global economic indicators and be ready to adjust the business if economic momentum slows further.