Cummins Inc. Earnings: Fifth Consecutive Quarter of Double-Digit Growth

S&P 500 (NYSE:SPY) component Cummins Inc. (NYSE:CMI) reported net income above Wall Street’s expectations for the most recent quarter. 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 First Quarter

Results: Net income for the engines rose to $455 million ($2.38 per share) vs. $343 million ($1.75 per share) in the same quarter a year earlier. This marks a rise of 32.7% from the year-earlier quarter.

Revenue: Rose 15.9% to $4.47 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cummins Inc. beat the mean analyst estimate of $2.22 per share. Analysts were expecting revenue of $4.4 billion.

Quoting Management: “Cummins continues to benefit from its geographic diversification and its leadership position in a number of end markets as evidenced by our very strong first quarter results,” said Tom Linebarger, Chairman and Chief Executive Officer. “Revenues in North America grew 40 percent in the first quarter, offsetting near-term softness in some emerging markets. I am delighted that through close coordination with our key OEM partners and strong execution from our manufacturing and supply chain teams, we have been able to quickly increase our production in North America to meet strong demand for our products.”

Key Stats:

For the past five quarters, the company has seen double-digit year-over-year percentage revenue growth. Over that span, the company has averaged growth of 34.2%, with the biggest boost coming in the first quarter of the last fiscal year when revenue rose 55.8% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the fourth quarter of the last fiscal year, net income rose 51.4% and in the third quarter of the last fiscal year, the figure rose 59.7%.

The company has beaten estiamtes for two quarters in a row. In the fourth quarter of the last fiscal year, it topped expectations with net income of $2.56 versus a mean estimate of net income of $2.24 per share.

Looking Forward: Analysts appear increasingly optimistic about the company’s results for the next quarter. The average estimate for the second quarter has moved up from $2.63 a share to $2.71 over the last ninety days. Over the past three months, the average estimate for the fiscal year has climbed from $9.78 per to share to $10.36.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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