Cummins Inc. Earnings Cheat Sheet: Beats Analysts’ Estimates

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 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 Second Quarter

Results: Net income for Cummins Inc. rose to $505 million ($2.60 per share) vs. $246 million ($1.25 per share) in the same quarter a year earlier. This is a more than twofold rise from the year earlier quarter.

Revenue: Rose 44.7% to $4.64 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CMI beat the mean analyst estimate of $2.01 per share. It beat the average revenue estimate of $4.22 billion.

Quoting Management: “I am very optimistic about Cummins’ future,” said Tom Linebarger, President and Chief Operating Officer. “We are experiencing strong global demand in most of our markets. Our products are performing very well, we have strong leadership positions, and we are delivering strong profitability in all four businesses.”

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 37.7%, with the biggest boost coming in the first quarter when revenue rose 55.8% from the year earlier quarter.

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 2.4 percentage points to 25.9% from the year earlier quarter. Over that span, margins have grown on average 2.7 percentage points per quarter on a year-over-year basis.

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

The company has now topped analyst estimates for the last three quarters. It beat the mark by 31 cents in the first quarter and by 13 cents in the fourth quarter of the last fiscal year.

Competitors to Watch: Caterpillar Inc. (NYSE:CAT), Brunswick Corporation (NYSE:BC), Navistar Intl. Corp. (NYSE:NAV), Briggs & Stratton Corp. (NYSE:BGG), AB Volvo (VOLVY), China Yuchai Intl. Ltd. (NYSE:CYD), PACCAR Inc (NASDAQ:PCAR), BorgWarner Inc. (NYSE:BWA), REGAL-BELOIT CORPORATION (NYSE:RBC), and Generac Holdings Inc. (NYSE:GNRC).

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(Source: Xignite Financials)