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What's in the Offing for Cummins (CMI) in Q3 Earnings?
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Cummins Inc. (CMI - Free Report) is slated to release third-quarter 2022 results on Nov 03, before the market opens. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.87 and $6.96 billion, respectively.
For the third quarter, the consensus estimate for CMI’s earnings per share has moved up by 5 cents in the past 30 days. Its bottom-line estimates imply a rise of 34.9% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year increase of 16.6%. Over the trailing four quarters, CMI surpassed earnings estimates on two occasions and missed twice, with the average surprise being 1.49%. This is depicted in the graph below:
In second-quarter 2022, CMI’s adjusted earnings per share of $4.77 surpassed the consensus metric of $4.37. Higher-than-expected EBITDA in the Engine, Distribution and Components segments resulted in the outperformance. The bottom line also increased 15% year over year from $4.15 a share. The company reported net sales of $6,586 million, up 7.8% from $6,111 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $6,477 million.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Cummins for the quarter to be reported, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: CMI has an Earnings ESP of -0.16%. This is because the Most Accurate Estimate is pegged 1 cent lower than the Zacks Consensus Estimate.
Zacks Rank: It currently carries a Zacks Rank of 2.
Cummins, the global leader in engine production, has an impressive product portfolio. Its focus on new and innovative product launches across the third quarter is likely to have boosted its quarterly performance. Also, as the demand for hydrogen energy heightens worldwide, Cummins’ offerings see an increased demand. The company’s efforts to ramp up its capabilities in electrification, fuel cell and hydrogen production technology and strategic partnerships are praiseworthy, which might have aided its growth in the to-be-reported quarter.
The increase in heavy-duty and medium-duty truck production in North America, Europe and India is likely to have aided its top-line growth in the quarter. Moreover, the acquisition of Meritor gives Cummins a strong footing as it brings forth lucrative growth opportunities across its range of power solutions and applications. It also adds to the company’s efforts toward de-carbonized offerings. These are expected to have provided a boost to the engine maker’s prospects in the third quarter of 2022.
Encouragingly, the Zacks Consensus Estimate for net sales and EBITDA for most of Cummins’ key segments indicate an improvement over last-year reported numbers.
On the flip side, high commodity, labor and logistics costs are likely to have clipped margins. Also, a boost to its capabilities in fuel cell and hydrogen production technology has made R&D and SG&A expenses spiral and are expected to have acted as spoilsports. Additionally, the company’s New Power segment is suffering from continuous losses amid high product and technology-related expenses for the past several quarters. The trend is likely to have continued in the to-be-reported quarter, hurting margins.
Here’s a briefing of revenue and EBITDA estimates for Cummins’ segments.
The Zacks Consensus Estimate for quarterly sales for the Engine segment is pegged at $2,824 million, suggesting an increase from the year-ago quarter’s $2,578 million. The consensus mark for EBITDA is $421 million, implying an increase from $391 recorded a year ago.
For the third quarter, the Zacks Consensus Estimate for net sales for the Distribution segment is $2,118 million, indicating an uptick from $1,959 million generated in the year-ago quarter. The consensus mark for the segment’s EBITDA is $240 million, indicating an increase from $192 million.
For the quarter under discussion, the Zacks Consensus Estimate for net sales from the Power System segment is $1,252 million, suggesting improvement from $1,164 million recorded in third-quarter 2021. The consensus mark for the segment’s EBITDA is $152 million, implying an increase from $134 million.
The Zacks Consensus Estimate of $2,461 million for the Components segment’s quarterly net sales implies an increase from the year-ago quarter’s $1,793 million. The consensus estimate for the segment’s EBITDA is $374 million, which indicates a rise from $253 million recorded in third-quarter 2021.
For the New Power segment, the consensus estimate for revenues is $59 million, indicating a rise from $23 million recorded in the corresponding quarter of 2021. The consensus mark for pretax loss is pegged at $74 million, indicating a deterioration from the year-ago reported loss of $58 million.
Stocks With Favorable Combination
While an earnings beat is uncertain for Cummins, here are a few stocks, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
CNH Industrial (CNHI - Free Report) will release third-quarter 2022 results on Nov 08. The company has an Earnings ESP of +6.25% and a Zacks Rank #3.
The Zacks Consensus Estimate for CNH Industrial’s to-be-reported quarter’s earnings and revenues is pegged at 32 cents per share and $5.33 billion, respectively. CNHI surpassed earnings estimates in all four trailing quarters, with the average surprise being 27.73%.
Rivian Automotive (RIVN - Free Report) will release third-quarter 2022 results on Nov 9. The company has an Earnings ESP of +0.47% and a Zacks Rank #3.
The Zacks Consensus Estimate is pegged at a loss of $1.78 a share for Rivian’s to-be-reported quarter and the same for revenues is pegged at $512.31 million. RIVN surpassed earnings estimates in two of the trailing four quarters and missed in the rest, with the average surprise being a negative 6.68%.
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What's in the Offing for Cummins (CMI) in Q3 Earnings?
Cummins Inc. (CMI - Free Report) is slated to release third-quarter 2022 results on Nov 03, before the market opens. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.87 and $6.96 billion, respectively.
For the third quarter, the consensus estimate for CMI’s earnings per share has moved up by 5 cents in the past 30 days. Its bottom-line estimates imply a rise of 34.9% from the year-ago reported number. The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year increase of 16.6%. Over the trailing four quarters, CMI surpassed earnings estimates on two occasions and missed twice, with the average surprise being 1.49%. This is depicted in the graph below:
Cummins Inc. Price and EPS Surprise
Cummins Inc. price-eps-surprise | Cummins Inc. Quote
Q2 Highlights
In second-quarter 2022, CMI’s adjusted earnings per share of $4.77 surpassed the consensus metric of $4.37. Higher-than-expected EBITDA in the Engine, Distribution and Components segments resulted in the outperformance. The bottom line also increased 15% year over year from $4.15 a share. The company reported net sales of $6,586 million, up 7.8% from $6,111 million in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $6,477 million.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Cummins for the quarter to be reported, as it does not have the right combination of the two key ingredients. A combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: CMI has an Earnings ESP of -0.16%. This is because the Most Accurate Estimate is pegged 1 cent lower than the Zacks Consensus Estimate.
Zacks Rank: It currently carries a Zacks Rank of 2.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors at Play
Cummins, the global leader in engine production, has an impressive product portfolio. Its focus on new and innovative product launches across the third quarter is likely to have boosted its quarterly performance. Also, as the demand for hydrogen energy heightens worldwide, Cummins’ offerings see an increased demand. The company’s efforts to ramp up its capabilities in electrification, fuel cell and hydrogen production technology and strategic partnerships are praiseworthy, which might have aided its growth in the to-be-reported quarter.
The increase in heavy-duty and medium-duty truck production in North America, Europe and India is likely to have aided its top-line growth in the quarter. Moreover, the acquisition of Meritor gives Cummins a strong footing as it brings forth lucrative growth opportunities across its range of power solutions and applications. It also adds to the company’s efforts toward de-carbonized offerings. These are expected to have provided a boost to the engine maker’s prospects in the third quarter of 2022.
Encouragingly, the Zacks Consensus Estimate for net sales and EBITDA for most of Cummins’ key segments indicate an improvement over last-year reported numbers.
On the flip side, high commodity, labor and logistics costs are likely to have clipped margins. Also, a boost to its capabilities in fuel cell and hydrogen production technology has made R&D and SG&A expenses spiral and are expected to have acted as spoilsports. Additionally, the company’s New Power segment is suffering from continuous losses amid high product and technology-related expenses for the past several quarters. The trend is likely to have continued in the to-be-reported quarter, hurting margins.
Here’s a briefing of revenue and EBITDA estimates for Cummins’ segments.
The Zacks Consensus Estimate for quarterly sales for the Engine segment is pegged at $2,824 million, suggesting an increase from the year-ago quarter’s $2,578 million. The consensus mark for EBITDA is $421 million, implying an increase from $391 recorded a year ago.
For the third quarter, the Zacks Consensus Estimate for net sales for the Distribution segment is $2,118 million, indicating an uptick from $1,959 million generated in the year-ago quarter. The consensus mark for the segment’s EBITDA is $240 million, indicating an increase from $192 million.
For the quarter under discussion, the Zacks Consensus Estimate for net sales from the Power System segment is $1,252 million, suggesting improvement from $1,164 million recorded in third-quarter 2021. The consensus mark for the segment’s EBITDA is $152 million, implying an increase from $134 million.
The Zacks Consensus Estimate of $2,461 million for the Components segment’s quarterly net sales implies an increase from the year-ago quarter’s $1,793 million. The consensus estimate for the segment’s EBITDA is $374 million, which indicates a rise from $253 million recorded in third-quarter 2021.
For the New Power segment, the consensus estimate for revenues is $59 million, indicating a rise from $23 million recorded in the corresponding quarter of 2021. The consensus mark for pretax loss is pegged at $74 million, indicating a deterioration from the year-ago reported loss of $58 million.
Stocks With Favorable Combination
While an earnings beat is uncertain for Cummins, here are a few stocks, which, according to our model, have the right combination of elements to post an earnings beat for the quarter to be reported:
CNH Industrial (CNHI - Free Report) will release third-quarter 2022 results on Nov 08. The company has an Earnings ESP of +6.25% and a Zacks Rank #3.
The Zacks Consensus Estimate for CNH Industrial’s to-be-reported quarter’s earnings and revenues is pegged at 32 cents per share and $5.33 billion, respectively. CNHI surpassed earnings estimates in all four trailing quarters, with the average surprise being 27.73%.
Rivian Automotive (RIVN - Free Report) will release third-quarter 2022 results on Nov 9. The company has an Earnings ESP of +0.47% and a Zacks Rank #3.
The Zacks Consensus Estimate is pegged at a loss of $1.78 a share for Rivian’s to-be-reported quarter and the same for revenues is pegged at $512.31 million. RIVN surpassed earnings estimates in two of the trailing four quarters and missed in the rest, with the average surprise being a negative 6.68%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.