Engine maker Cummins takes $158 million charge over operations halt in Russia
2022.05.03 16:47
(Reuters) – U.S. truck engine maker Cummins Inc (NYSE:CMI) said on Tuesday it took a $158 million charge in the first quarter related to its suspension of operations in Russia.
Cummins said the charge included inventory write-downs, reserves on accounts receivable, impairment of a joint venture investment with Russian truck maker Kamaz Inc and other costs.
Companies around the globe including Adidas (OTC:ADDYY), Renault (EPA:RENA) and Volvo have all accounted for a sizeable hit to earnings after idling their operations in Russia, post its invasion of Ukraine.
Cummins, whose customers include Paccar (NASDAQ:PCAR) Inc, Daimler AG (ETR:MBGn) and Stellantis NV, had warned in February of “some impact” to its business in Russia and said it was analyzing and preparing for existing and anticipated sanctions.
The company also said supply-chain constraints continued to be a challenge and it was limiting growth.
“We have experienced and expect to continue to experience, an inability to collect customer receivables and may be the subject of litigation in connection with our suspension of commercial operations in Russia.” the company said.
The company posted first-quarter sales of $6.39 billion ahead of Refinitiv IBES estimates of $6.03 billion, helped in part by price hikes.
