Cummins has posted first-quarter net income down 23% to US511m, while revenue fell 17% to US$5bn.
Lower truck production in North America and weaker demand in global construction, mining, and power generation markets drove the majority of the revenue decrease.
Sales in North America declined by 16% while international revenues decreased by 17%, led by falls in Europe, Asia Pacific, Latin America, India and China.
“We delivered strong profitability in the first quarter, supported by the commitment of our employees to serve our customers and the benefit of cost reduction actions we initiated in the second half of 2019,” said Cummins chairman and CEO, Tom Linebarger.
“Amidst the unprecedented COVID-19 pandemic, the health and safety of our employees and the communities in which we operate is our top priority. Our teams are working hard to support the global economy, leveraging our flexibility and strong supplier network to help our customers deliver essential products and support response efforts.
“Given the significant impact the pandemic will have on demand across our industry in the second quarter and beyond, we are continuing to take actions to reduce cost and boost our already strong liquidity.”
Due to uncertainty related to the coronavirus pandemic, the supplier is not providing revenue or profitability guidance for 2020. While customer operations have begun to resume activity, the company does expect a significant impact to its second quarter results due to disruptions across customer and supplier operations and lower end market demand.
For now, the company is planning for weak demand levels to persist for some time. In response to these challenges the company recently announced a set of cost reduction actions, including a temporary reduction in salaries.
In addition, the company is lowering its targeted capital expenditures by more than 25% compared to 2019.