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Cummins (CMI) Down 0.4% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Cummins (CMI - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cummins due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cummins Q1 Earnings Beat Mark
Cummins reported first-quarter 2022 earnings of $4.04 per share, flat year over year. The figure topped the Zacks Consensus Estimate of $3.55. Higher-than-expected EBITDA in the Engine segment resulted in the outperformance. Cummins’ revenues totaled $6,385 million, up from $6,092 million recorded in the year-ago quarter. The top line beat Zacks Consensus Estimate of $6,026 million.
Key Takeaways
In the reported quarter, sales in the Engine segment were up 12% year over year to $2,753 million. The segment’s EBITDA rose to $392 million (accounting for 14.2% of sales) from $354 million (14.4% of sales). The metric also crossed the Zacks Consensus Estimate of $328 million. On-highway and Off-highway revenues climbed 14% and 5%, respectively, from the prior-year quarter. Sales increased 15% in North America and 4% in international markets.
Sales in the Distribution segment totaled $2,117 million, up 15% year over year. Revenues from North America jumped 17%, while international sales soared 13%. The segment’s EBITDA came in at $110 million (5.2% of sales), sharply down from the previous year’s $160 million (8.7% of sales). The metric also missed the consensus mark of $163 million. This was on account of the suspension of activities in Russia.
Sales in the Components segment were down 8% from the prior-year quarter to $1,988 million. Sales in North America were up 8%, while the same in international markets decreased 21% amid weak demand from China and India. The segment’s EBITDA was $320 million (16.1% of sales) compared with the year-ago figure of $421 million (19.6% of sales). The metric also missed the Zacks Consensus Estimate of $342 million.
Sales in the Power Systems segment rose 14% from the year-ago quarter to $1,160 million. The segment’s EBITDA decreased to $90 million (7.8% of sales) from $126 million (12.3% of sales) and lagged the consensus mark of $117 million. Power generation revenues increased 9% year over year, while industrial revenues soared 21%, owing to stronger demand in mining and oil and gas markets.
Sales in the New Power segment came in at $31 million, down 11% from the year-ago level. The segment incurred a pretax loss of $67 million. The loss was wider than the consensus mark of $65 million.
Financials
Cummins’ cash and cash equivalents were $2,276 million as of Mar 31, 2022, down from $2,592 million on Dec 31, 2021. Long-term debt totaled $3,502 million, down from $3,579 million on Dec 31, 2021.
Cummins raised its 2022 guidance for revenues. It expects revenues to grow 8% year over year compared with the previous estimate of 6%. EBITDA forecast remains unchanged at 15.5% of sales.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Cummins has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cummins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Cummins (CMI) Down 0.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Cummins (CMI - Free Report) . Shares have lost about 0.4% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Cummins due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Cummins Q1 Earnings Beat Mark
Cummins reported first-quarter 2022 earnings of $4.04 per share, flat year over year. The figure topped the Zacks Consensus Estimate of $3.55. Higher-than-expected EBITDA in the Engine segment resulted in the outperformance. Cummins’ revenues totaled $6,385 million, up from $6,092 million recorded in the year-ago quarter. The top line beat Zacks Consensus Estimate of $6,026 million.
Key Takeaways
In the reported quarter, sales in the Engine segment were up 12% year over year to $2,753 million. The segment’s EBITDA rose to $392 million (accounting for 14.2% of sales) from $354 million (14.4% of sales). The metric also crossed the Zacks Consensus Estimate of $328 million. On-highway and Off-highway revenues climbed 14% and 5%, respectively, from the prior-year quarter. Sales increased 15% in North America and 4% in international markets.
Sales in the Distribution segment totaled $2,117 million, up 15% year over year. Revenues from North America jumped 17%, while international sales soared 13%. The segment’s EBITDA came in at $110 million (5.2% of sales), sharply down from the previous year’s $160 million (8.7% of sales). The metric also missed the consensus mark of $163 million. This was on account of the suspension of activities in Russia.
Sales in the Components segment were down 8% from the prior-year quarter to $1,988 million. Sales in North America were up 8%, while the same in international markets decreased 21% amid weak demand from China and India. The segment’s EBITDA was $320 million (16.1% of sales) compared with the year-ago figure of $421 million (19.6% of sales). The metric also missed the Zacks Consensus Estimate of $342 million.
Sales in the Power Systems segment rose 14% from the year-ago quarter to $1,160 million. The segment’s EBITDA decreased to $90 million (7.8% of sales) from $126 million (12.3% of sales) and lagged the consensus mark of $117 million. Power generation revenues increased 9% year over year, while industrial revenues soared 21%, owing to stronger demand in mining and oil and gas markets.
Sales in the New Power segment came in at $31 million, down 11% from the year-ago level. The segment incurred a pretax loss of $67 million. The loss was wider than the consensus mark of $65 million.
Financials
Cummins’ cash and cash equivalents were $2,276 million as of Mar 31, 2022, down from $2,592 million on Dec 31, 2021. Long-term debt totaled $3,502 million, down from $3,579 million on Dec 31, 2021.
Cummins raised its 2022 guidance for revenues. It expects revenues to grow 8% year over year compared with the previous estimate of 6%. EBITDA forecast remains unchanged at 15.5% of sales.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
At this time, Cummins has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Cummins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.