COLUMBUS, Ind. - Cummins Inc . (NYSE: NYSE:CMI), a global power leader with a perfect InvestingPro Piotroski Score of 9 indicating excellent financial health, has announced the acquisition of key assets from First Mode, a company specializing in retrofit hybrid solutions for mining and rail operations. The deal, which includes hybrid product lines and a comprehensive intellectual property portfolio featuring hydrogen and battery powertrain solutions, aims to reduce the total cost of ownership for mining equipment and advance decarbonization efforts within the industry.
The acquisition also encompasses First Mode's commercial portfolio and its technical and manufacturing teams across Australia, the United States, and Chile. First Mode will maintain customer service during the transition period, with product shipments expected in the first quarter of the year.
This strategic move is part of Cummins' broader commitment to environmental sustainability, particularly through its Destination Zero strategy. The company is actively working on technology pathways, including product hybridization and clean fuels like ethanol and methanol, to support the mining industry's shift towards a sustainable future. The market has responded positively to these initiatives, with Cummins stock delivering an impressive 52% return over the past year. Want deeper insights? InvestingPro subscribers have access to 12 additional exclusive tips about Cummins' performance and potential.
Jenny Bush, President of Power Systems at Cummins, emphasized the significance of the acquisition, stating, "This acquisition is an important step forward in our goal to lead our Power Systems customers through the energy transition. With First Mode's hybrid retrofit technology, we are accelerating our ability to provide decarbonization solutions that meet miners' need to drive down operating costs today."
Cummins' dedication extends to collaborating with original equipment manufacturers (OEMs) and miners to ensure that these new technologies are thoroughly tested in real-world scenarios. The company's global service network is poised to support the integration and ongoing maintenance of these emerging bridge technologies in mining and rail applications.
Cummins Inc., headquartered in Columbus (WA:CLC), Indiana, operates across five business segments and offers a wide range of powertrains and related components. In 2023, the company reported earnings of approximately $735 million on sales of $34.1 billion, maintaining a healthy gross profit margin of 24.75% and operating with a moderate debt-to-equity ratio of 0.69. According to InvestingPro Fair Value analysis, the stock currently appears slightly undervalued, suggesting potential upside for investors. The acquisition of First Mode's assets is a testament to Cummins' continued investment in innovative solutions that support the industry's transition to lower-carbon operations. For comprehensive analysis including detailed valuations and growth projections, investors can access the full Pro Research Report, available exclusively to InvestingPro subscribers.
This article is based on a press release statement.
In other recent news, Cummins Inc. has been in the spotlight with several key developments. The company's fourth-quarter performance surpassed Wall Street's expectations, with earnings per share exceeding consensus estimates by 9.8%, and adjusted EBITDA reaching $1.332 billion, beating the consensus of $1.238 billion. Truist Securities revised its price target for Cummins from $425 to $420, while maintaining a Hold rating on the stock. Similarly, Barclays (LON:BARC) and CFRA also revised their price targets, with Barclays lifting it from $310 to $381 and CFRA from $345 to $385.
Cummins has also shared its fiscal year 2025 guidance, setting an EPS of around $22.65, slightly higher than the street estimate. The company anticipates EBITDA margins between 16.2% and 17.2% for 2025. In terms of industry outlook, Cummins expects a pre-buy scenario ahead of the 2027 emissions regulations change in North America and predicts a decline in the medium-duty market due to recent order weaknesses.
Additionally, Cummins announced a reorganization related to its Accelera initiative, which focuses on the adoption of greener technologies, aiming to reach breakeven by 2027. These are recent developments that have been reflected in the revised price targets by Truist Securities, Barclays, and CFRA.
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