Operating Profit Margin
since 2005
Calculation
Cummins Inc., operating profit margin, long-term trends, calculation
| Operating profit margin | = | 100 | × | Operating income1 | ÷ | Net sales1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | 5.17% | = | 100 | × | 1,761) | ÷ | 34,065) |
| Dec 31, 2022 | 10.43% | = | 100 | × | 2,929) | ÷ | 28,074) |
| Dec 31, 2021 | 11.27% | = | 100 | × | 2,706) | ÷ | 24,021) |
| Dec 31, 2020 | 11.45% | = | 100 | × | 2,269) | ÷ | 19,811) |
| Dec 31, 2019 | 11.45% | = | 100 | × | 2,700) | ÷ | 23,571) |
| Dec 31, 2018 | 11.72% | = | 100 | × | 2,786) | ÷ | 23,771) |
| Dec 31, 2017 | 11.58% | = | 100 | × | 2,365) | ÷ | 20,428) |
| Dec 31, 2016 | 11.01% | = | 100 | × | 1,928) | ÷ | 17,509) |
| Dec 31, 2015 | 10.76% | = | 100 | × | 2,057) | ÷ | 19,110) |
| Dec 31, 2014 | 12.30% | = | 100 | × | 2,365) | ÷ | 19,221) |
| Dec 31, 2013 | 12.14% | = | 100 | × | 2,101) | ÷ | 17,301) |
| Dec 31, 2012 | 13.00% | = | 100 | × | 2,254) | ÷ | 17,334) |
| Dec 31, 2011 | 14.85% | = | 100 | × | 2,681) | ÷ | 18,048) |
| Dec 31, 2010 | 12.11% | = | 100 | × | 1,602) | ÷ | 13,226) |
| Dec 31, 2009 | 6.31% | = | 100 | × | 682) | ÷ | 10,800) |
| Dec 31, 2008 | 8.87% | = | 100 | × | 1,272) | ÷ | 14,342) |
| Dec 31, 2007 | 8.87% | = | 100 | × | 1,158) | ÷ | 13,048) |
| Dec 31, 2006 | 9.95% | = | 100 | × | 1,131) | ÷ | 11,362) |
| Dec 31, 2005 | 9.01% | = | 100 | × | 894) | ÷ | 9,918) |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in millions
The operating profit margin from 2005 to 2023 reveals a trajectory of expansion and stabilization followed by a recent significant contraction. While net sales grew substantially over the analyzed period, operating income did not scale proportionally in the final year, leading to a severe compression of margins.
- Early Period and Volatility (2005–2009)
- Between 2005 and 2008, the operating profit margin remained relatively stable, fluctuating narrowly between 8.87% and 9.95%. This stability was interrupted in 2009, when the margin declined to 6.31%, marking a period of diminished operational efficiency relative to sales.
- Expansion and Peak Performance (2010–2011)
- A sharp recovery occurred in 2010, with the margin rising to 12.11%, followed by a peak of 14.85% in 2011. This represents the highest level of operational profitability observed in the timeframe, driven by an increase in operating income that significantly outpaced the growth in net sales.
- Stabilization Phase (2012–2021)
- For nearly a decade, the operating profit margin entered a period of relative consistency. From 2012 through 2021, margins generally oscillated between 10.76% and 12.30%. Despite fluctuations in total net sales, a steady ability to convert revenue into operating profit was maintained, with the margin remaining largely above the 11% threshold.
- Recent Margin Compression (2022–2023)
- A downward trend emerged in 2022 as the margin slipped to 10.43%. This was followed by a precipitous drop to 5.17% in 2023. Notably, this decline occurred despite net sales reaching a period high of 34,065 million US dollars, indicating that operating expenses grew significantly faster than revenue, resulting in the lowest operating margin since 2009.
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Comparison to Competitors
Cummins Inc., operating profit margin, long-term trends, comparison to competitors
| Cummins Inc. | Boeing Co. | Caterpillar Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|
| Dec 31, 2023 | 5.17% | -0.99% | 20.30% | 12.59% | 5.17% |
| Dec 31, 2022 | 10.43% | -5.33% | 13.97% | 12.65% | 8.07% |
| Dec 31, 2021 | 11.27% | -4.66% | 14.27% | 13.61% | 7.70% |
| Dec 31, 2020 | 11.45% | -21.95% | 11.67% | 13.22% | -3.34% |
| Dec 31, 2019 | 11.45% | -2.58% | 16.33% | 14.29% | 11.64% |
| Dec 31, 2018 | 11.72% | 11.85% | 16.00% | 13.64% | 12.86% |
| Dec 31, 2017 | 11.58% | 11.01% | 10.32% | 11.60% | 14.49% |
| Dec 31, 2016 | 11.01% | 6.17% | 1.39% | 11.74% | 14.28% |
| Dec 31, 2015 | 10.76% | 7.74% | 7.38% | 11.78% | 13.00% |
| Dec 31, 2014 | 12.30% | 8.23% | 10.22% | 12.26% | 15.01% |
| Dec 31, 2013 | 12.14% | 7.58% | 10.68% | 9.93% | 14.70% |
| Dec 31, 2012 | 13.00% | 7.72% | 13.59% | 9.40% | 13.32% |
| Dec 31, 2011 | 14.85% | 8.50% | 12.46% | 8.56% | 13.92% |
| Dec 31, 2010 | 12.11% | 7.73% | 9.94% | 8.94% | 13.23% |
| Dec 31, 2009 | 6.31% | 3.07% | 1.95% | 9.88% | 12.33% |
| Dec 31, 2008 | 8.87% | 6.49% | 9.26% | 12.01% | 13.14% |
| Dec 31, 2007 | 8.87% | 8.78% | 11.73% | 10.81% | 13.08% |
| Dec 31, 2006 | 9.95% | 4.90% | 12.66% | 9.98% | 12.94% |
| Dec 31, 2005 | 9.01% | 5.13% | 11.13% | 8.02% | 12.26% |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).