Cummins Earnings: Here’s Why Shares are Down Now

Cummins Inc. (NYSE:CMI) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 2.87%.

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Cummins Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share decreased 37.39% to $1.49 in the quarter versus EPS of $2.38 in the year-earlier quarter.

Revenue: Decreased 12.3% to $3.92 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cummins Inc. reported adjusted EPS income of $1.49 per share. By that measure, the company missed the mean analyst estimate of $1.86. It missed the average revenue estimate of $3.97 billion.

Quoting Management: “As anticipated, we experienced weak demand in the first quarter in many of our major markets,” said Chairman and CEO Tom Linebarger. “While uncertainty remains in a number of markets, we expect that the first quarter will mark the low point of the year for Company revenues. We expect moderately improving order trends in on-highway and construction markets in North America to be the most significant drivers of improvement in revenues going forward. We continue to make investments in our distribution system and in new products as we remain focused on future profitable growth.”

Key Stats (on next page)…

Revenue decreased 8.62% from $4.29 billion in the previous quarter. EPS decreased 25.5% from $2.00 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $2.27 to a profit $2.14. For the current year, the average estimate has moved down from a profit of $9.01 to a profit of $8.76 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)