Cummins Inc. Earnings Cheat Sheet: Double-Digit Growth Again

S&P 500 (NYSE:SPY) component Cummins Inc. (CMI) reported higher profit for the third quarter as revenue showed growth. Cummins 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 Third Quarter

Results: Net income for Cummins Inc. rose to $452 million ($2.35 per share) vs. $283 million ($1.44 per share) in the same quarter a year earlier. This marks a rise of 59.7% from the year earlier quarter.

Revenue: Rose 36% to $4.6 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CMI beat the mean analyst estimate of $2.25 per share. It fell short of the average revenue estimate of $4.61 billion.

Quoting Management: “We delivered strong performance in the third quarter and 2011 will be a record year for the company,” said Tom Linebarger, President and Chief Operating Officer. “Many of our key markets continue to show strong growth, for example, mining, oil & gas, and North American on-highway markets. However, as discussed at our recent investor conference, there is some uncertainty around the macro-economic environment. Government actions to reduce inflation in India and China have resulted in softer near-term demand than we previously expected. This, along with the recent strengthening of the US Dollar, has caused us to slightly soften full year revenue guidance to a range of $17.5 to $18 billion, which would represent an increase of over $4 billion or over 30 percent compared to 2010”.

Key Stats:

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose more than twofold and in the first quarter, the figure rose more than twofold.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 40 cents in the second quarter, by 31 cents in the first quarter, and by 13 cents in the fourth quarter of the last fiscal year.

Looking Forward: For next quarter, analysts have a more positive outlook about the company’s expected results. The average estimate for the fourth quarter is $2.49 per share, up from $2.31 ninety days ago. For the fiscal year, the average estimate has moved up from $8.14 a share to $8.88 over the last ninety days.

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)

 

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