Cummins Earnings: Easily Beats Estimates, Sales Shoot Up 55%

S&P 500 (NYSE:SPY) component Cummins Inc. (CMI) reported net income above Wall Street’s expectations for the most recent quarter. Cummins, Inc. is a company engaged in the design, manufacturing and distribution of diesel and natural gas (NYSE:UNG) engines and related technologies. Its services to markets worldwide include electric power generation systems and engine-related component products.

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Cummins Earnings Cheat Sheet for the First Quarter

Results: Net income for the diversified machinery company rose to $343 million ($1.75/share) vs. $149 million (75 cents/share) in the same quarter a year earlier. A more than twofold rise from the year earlier quarter.

Revenue: Rose 55.8% to $3.86 billion YoY.

Actual vs. Wall St. Expectations: CMI beat the mean analyst estimate of $1.44/share. Estimates ranged from $1.33 per share to $1.56 per share.

Quoting Management: “Our outstanding first quarter results demonstrate that we are well positioned to take advantage of our significant growth opportunities as markets around the world continue to recover,” said Tim Solso, Chairman and Chief Executive Officer. “The work we have done over the past two years to keep the Company strong during the global economic recession is paying off today.”

Key Stats: Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 0.5 percentage point to 24.8% from the year earlier quarter. Over that span, margins have grown on average 3.7 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three-straight quarters. In the fourth quarter of the last fiscal year, net income rose 34.1% and in the third quarter of the last fiscal year, the figure rose more than twofold.

Over the last five quarters, revenue has increased 29.1% on average year over year. The biggest increase came in the most recent quarter, when revenue rose 55.8% from the year earlier quarter.

Competitors to Watch: Brunswick Corporation (NYSE:BC), Navistar International Corp. (NYSE:NAV), Caterpillar, Inc. (NYSE:CAT), Briggs & Stratton Corp, (NYSE:BGG), AB Volvo (VOLVY), PACCAR Inc. (NASDAQ:PCAR), China Yuchai International Ltd. (NYSE:CYD), BorgWarner Inc. (NYSE:BWA), Regal-Beloit Corporation (NYSE:RBC), General Electric (NYSE:GE), Deere and Company (NYSE:DE) and Generac Holdings Inc. (NYSE:GNRC).

Today’s Performance: Shares of CMI are up over 7% in today’s trading.


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