Back to top

Analyst Blog

Cummins Inc. (CMI - Analyst Report) and its joint venture Cummins Westport Inc. announced a recall of 25,013 engines. The recalled engines are Cummins Westport Model ISL G engines produced between Sep 2007 and Feb 2014 and Cummins Westport Model ISX12 G engines manufactured in the Feb 2013–Feb 2014 period.

These engines feature in a range of commercial vehicles, including school and transit buses as well as fire trucks. Blue Bird Corp. is one of the school bus manufacturers that use these engines.
 
The recall will address a fault in the engine’s sensor, which can stop working in cold weather conditions, leading to fire. According to the National Highway Traffic Safety Administration, the condensation in the tubes which distribute air into the engine may freeze during cold weather. The frozen particles in the tube will impede the proper functioning of the pressure sensor, thus raising exhaust temperatures, eventually causing a fire.

There have been no reports of injuries due to this problem. However, there have been reports of two fire incidents in vehicle exhaust pipes triggered by the problem.

Cummins posted earnings per share of $1.94 (excluding special items) in the fourth quarter of 2013, compared with $1.93 reported in the year-ago quarter. However, earnings lagged the Zacks Consensus Estimate of $1.98 per share.

Revenues in the quarter rose 6.9% year over year to $4.6 billion, mainly driven by higher revenues in North America, China and Brazil, partially offset by poor sales in Mexico, India and Australia. Revenues surpassed the Zacks Consensus Estimate of $4.3 billion.

Cummins Inc. is a leading worldwide designer, manufacturer and distributor of diesel and natural gas engines, electric power generation systems, and engine-related components, fuel systems and air handling systems. Currently, Cummins retains a Zacks Rank #3 (Hold).

Other better-performing stocks in the broader industry include STRATTEC Security Corp. (STRT - Snapshot Report), Allison Transmission Holdings, Inc. (ALSN - Snapshot Report) and Gentex Corp. (GNTX - Snapshot Report). While STRATTEC Security and Allison Transmission sport a Zacks Rank #1 (Strong Buy), Gentex is a Zacks Rank #2 (Buy) stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%