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Cummins (CMI) to Report Q4 Earnings: What's in the Offing?
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Cummins Inc. (CMI - Free Report) is slated to release fourth-quarter 2023 results on Feb 6 before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.41 and $8.08 billion, respectively.
For the fourth quarter, the consensus estimate for CMI’s earnings per share has moved down by a penny in the past 30 days. Its bottom-line estimates imply a decline of 2.43% from the year-ago reported number.
The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year rise of 3.93%. Over the trailing four quarters, CMI surpassed earnings estimates on two occasions and missed twice, the average surprise being 3.59%. This is depicted in the graph below:
In third-quarter 2023, CMI’s adjusted earnings per share of $4.73 improved from $3.21 in the prior-year quarter. The figure also topped the Zacks Consensus Estimate of $4.63.
Cummins’ revenues totaled $8.43 billion, up from $7.33 billion recorded in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $8.13 billion.
Factors to Shape Q4 Results
After a solid third-quarter performance, the company raised its guidance for heavy-duty truck sales in North America. It now expects full-year sales in the range of 280,000 to 300,000 units. This is likely to have buoyed the demand for Cummins’ products.
An upbeat projection for full-year 2023 revenues also sparks optimism surrounding fourth-quarter results. The company expects full-year revenues to increase 18-21% year over year, driven by growth across all segments. Cummins is riding high on the Meritor buyout.
Strategic acquisitions and an upbeat full-year forecast are likely to have boosted the results of the to-be-reported quarter.
Discouragingly, Cummin’s Accelera segment is suffering from continuous losses amid high product and technology-related expenses and the trend is likely to persist. The R&D and engineering expenses of the Accelera segment are likely to increase, thereby hurting the firm’s cash flows and margins in the to-be-reported quarter. Supply chain constraints, logistical bottlenecks and elevated freight and transportation costs are likely to put pressure on the firm’s fourth-quarter margins.
Here’s a brief look at the revenues and EBITDA estimates for Cummins’ segments.
For the fourth quarter, our estimate for quarterly sales of the Engine segment is pegged at $2.76 billion, suggesting a rise from $2.64 billion reported in fourth-quarter 2022. Our estimate for the segment’s EBITDA is $357.4 million, implying a decline from $366 recorded in the fourth quarter of 2022.
For the fourth quarter, our estimate for sales from the Distribution segment is $2.52 billion, indicating a rise from year-ago sales of $2.32 billion. Our forecast for the segment’s EBITDA is $311.6 million, suggesting a rise from $256 million reported in the fourth quarter of 2022.
For the quarter under discussion, we expect net sales from the Power System segment to be $1.42 billion, suggesting a rise from $1.32 billion recorded in fourth-quarter 2022. Our forecast for the segment’s EBITDA is $209.9 million, implying a rise from $185 million generated in the fourth quarter of 2022.
Our projection of $3.24 billion for the Components segment’s quarterly net sales implies an increase from $3.1 billion in the fourth quarter of 2022. Our estimate for the segment’s EBITDA is pegged at $499.1 million, indicating a rise from $377 million recorded in fourth-quarter 2022.
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. That is not the case here, as elaborated below.
Earnings ESP: CMI has an Earnings ESP of -0.96%. This is because the Most Accurate Estimate is pegged 4 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are a few players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
The Zacks Consensus Estimate for F’s to-be-reported quarter’s earnings and revenues is pegged at 13 cents per share and $37.77 billion, respectively. Ford surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 20.30%.
BorgWarner Inc. (BWA - Free Report) will release fourth-quarter 2023 results on Feb 8. The company has an Earnings ESP of +3.25% and a Zacks Rank #3.
The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $3.61 billion, respectively. BorgWarner surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 10.93%.
Allison Transmission Holdings, Inc. (ALSN - Free Report) will release fourth-quarter 2023 results on Feb 13. The company has an Earnings ESP of +3.73% and a Zacks Rank #2.
The Zacks Consensus Estimate for ALSN’s to-be-reported quarter’s earnings and revenues is pegged at $1.42 per share and $755.14 million, respectively. Allison surpassed earnings estimates in each of the trailing four quarters, the average surprise being 17.23%.
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Cummins (CMI) to Report Q4 Earnings: What's in the Offing?
Cummins Inc. (CMI - Free Report) is slated to release fourth-quarter 2023 results on Feb 6 before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.41 and $8.08 billion, respectively.
For the fourth quarter, the consensus estimate for CMI’s earnings per share has moved down by a penny in the past 30 days. Its bottom-line estimates imply a decline of 2.43% from the year-ago reported number.
The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year rise of 3.93%. Over the trailing four quarters, CMI surpassed earnings estimates on two occasions and missed twice, the average surprise being 3.59%. This is depicted in the graph below:
Cummins Inc. Price and EPS Surprise
Cummins Inc. price-eps-surprise | Cummins Inc. Quote
Q3 Highlights
In third-quarter 2023, CMI’s adjusted earnings per share of $4.73 improved from $3.21 in the prior-year quarter. The figure also topped the Zacks Consensus Estimate of $4.63.
Cummins’ revenues totaled $8.43 billion, up from $7.33 billion recorded in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $8.13 billion.
Factors to Shape Q4 Results
After a solid third-quarter performance, the company raised its guidance for heavy-duty truck sales in North America. It now expects full-year sales in the range of 280,000 to 300,000 units. This is likely to have buoyed the demand for Cummins’ products.
An upbeat projection for full-year 2023 revenues also sparks optimism surrounding fourth-quarter results. The company expects full-year revenues to increase 18-21% year over year, driven by growth across all segments. Cummins is riding high on the Meritor buyout.
Strategic acquisitions and an upbeat full-year forecast are likely to have boosted the results of the to-be-reported quarter.
Discouragingly, Cummin’s Accelera segment is suffering from continuous losses amid high product and technology-related expenses and the trend is likely to persist. The R&D and engineering expenses of the Accelera segment are likely to increase, thereby hurting the firm’s cash flows and margins in the to-be-reported quarter. Supply chain constraints, logistical bottlenecks and elevated freight and transportation costs are likely to put pressure on the firm’s fourth-quarter margins.
Here’s a brief look at the revenues and EBITDA estimates for Cummins’ segments.
For the fourth quarter, our estimate for quarterly sales of the Engine segment is pegged at $2.76 billion, suggesting a rise from $2.64 billion reported in fourth-quarter 2022. Our estimate for the segment’s EBITDA is $357.4 million, implying a decline from $366 recorded in the fourth quarter of 2022.
For the fourth quarter, our estimate for sales from the Distribution segment is $2.52 billion, indicating a rise from year-ago sales of $2.32 billion. Our forecast for the segment’s EBITDA is $311.6 million, suggesting a rise from $256 million reported in the fourth quarter of 2022.
For the quarter under discussion, we expect net sales from the Power System segment to be $1.42 billion, suggesting a rise from $1.32 billion recorded in fourth-quarter 2022. Our forecast for the segment’s EBITDA is $209.9 million, implying a rise from $185 million generated in the fourth quarter of 2022.
Our projection of $3.24 billion for the Components segment’s quarterly net sales implies an increase from $3.1 billion in the fourth quarter of 2022. Our estimate for the segment’s EBITDA is pegged at $499.1 million, indicating a rise from $377 million recorded in fourth-quarter 2022.
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. That is not the case here, as elaborated below.
Earnings ESP: CMI has an Earnings ESP of -0.96%. This is because the Most Accurate Estimate is pegged 4 cents lower than the Zacks Consensus Estimate. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3.
Stocks With the Favorable Combination
Here are a few players from the auto space that, per our model, have the correct ingredients to post an earnings beat this time.
Ford (F - Free Report) will release fourth-quarter 2023 results on Feb 6. The company has an Earnings ESP of +6.55% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for F’s to-be-reported quarter’s earnings and revenues is pegged at 13 cents per share and $37.77 billion, respectively. Ford surpassed earnings estimates in two of the trailing four quarters and missed twice, the average surprise being 20.30%.
BorgWarner Inc. (BWA - Free Report) will release fourth-quarter 2023 results on Feb 8. The company has an Earnings ESP of +3.25% and a Zacks Rank #3.
The Zacks Consensus Estimate for BWA’s to-be-reported quarter’s earnings and revenues is pegged at 93 cents per share and $3.61 billion, respectively. BorgWarner surpassed earnings estimates in three of the trailing four quarters and missed once, the average surprise being 10.93%.
Allison Transmission Holdings, Inc. (ALSN - Free Report) will release fourth-quarter 2023 results on Feb 13. The company has an Earnings ESP of +3.73% and a Zacks Rank #2.
The Zacks Consensus Estimate for ALSN’s to-be-reported quarter’s earnings and revenues is pegged at $1.42 per share and $755.14 million, respectively. Allison surpassed earnings estimates in each of the trailing four quarters, the average surprise being 17.23%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.