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Cummins Inc. (CMI - Free Report) reported third-quarter 2024 earnings of $5.60 per share, which increased from $4.73 recorded in the corresponding quarter of 2023. The bottom line also surpassed the Zacks Consensus Estimate of $4.89 per share. The outperformance was driven by higher-than-expected revenues from the Power Systems and Distribution segments. Cummins’ revenues totaled $8.46 billion, up from $8.43 billion recorded in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $8.28 billion.
Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar.
In the reported quarter, sales in the Engine segment were down 1% year over year to $2.91 billion. The metric also missed our estimate of $2.94 billion. Sales in North America decreased 2% due to a weaker demand in the North American heavy-duty truck market. International sales increased 4% year over year, driven by strength in global medium-duty truck markets. The segment’s EBITDA rose to $427 million (accounting for 14.7% of sales) from $395 million (13.5% of sales) in the year-ago period and beat our estimate of $399.6 million.
Sales in the Distribution segment totaled $3 billion, which rose 16% year over year and topped our projection of $2.6 billion. Sales in North America increased 13%, while international sales rose 25% due to increased demand for power generation products. The segment’s EBITDA came in at $370 million (12.5% of sales), which increased from the year-ago quarter’s $306 million (12.1% of sales) and surpassed our estimate of $303.4 million.
Sales in the Components segment totaled $2.7 billion, down 16% from the prior-year quarter. Sales also missed our estimate of $2.92 billion. Revenues in North America fell 14% and international sales contracted 18% on the separation of the Atmus business and lower demand in heavy-duty truck. The segment’s EBITDA was $351 million (12.9% of sales), lower than the year-ago figure of $441 million (13.6% of sales). The metric missed our estimate of $410.2 million.
Sales in the Power Systems segment rose 17% from the year-ago quarter to $1.7 billion and beat our estimate of $1.51 billion. While power generation revenues rose 24% on the back of higher global demand (especially for the data center market), industrial revenues were up 7%, thanks to strong mining demand. The segment’s EBITDA rose to $328 million (19.4% of sales) from $234 million (16.2% of sales) and breezed past our estimate of $275.6 million.
Sales in the Accelera segment came in at $110 million, up 7% from the year-ago level but lagged our estimate of $125.3 million. The segment incurred a pretax loss of $115 million, wider than our estimate of $104.7 million. Costs related to the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery electric vehicles, resulted in EBITDA losses.
CMI's Financials & Outlook
Cummins’ cash and cash equivalents were $1.73 billion as of Sept. 30, 2024, down from $2.18 billion on Dec. 31, 2023. Long-term debt totaled $4.86 billion, up from $4.8 billion as of Dec. 31, 2023.
Cummins expects full-year 2024 revenues to be down 3% to flat. EBITDA is now anticipated to be 15.5% compared with the prior guided range of 15-15.5% due to continued improvements in the Power Systems and Distribution segments. Cummins continues to stick to its plan of returning nearly 50% of its operating cash flow to shareholders.
The Zacks Consensus Estimate for HMC’s fiscal 2025 sales suggests year-over-year growth of 3.33%. Earnings per share (EPS) estimates for fiscal 2025 & 2026 have improved 12 cents and 13 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for REE’s 2024 earnings suggests year-over-year growth of 64.37%. EPS estimates for 2024 and 2025 have improved by $2.98 and $2.75, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 20.91% and 23.63%, respectively. EPS estimates for 2024 and 2025 have improved by 12 cents and 13 cents, respectively, in the past seven days.
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Cummins Q3 Earnings Surpass Expectations, Revenues Rise Y/Y
Cummins Inc. (CMI - Free Report) reported third-quarter 2024 earnings of $5.60 per share, which increased from $4.73 recorded in the corresponding quarter of 2023. The bottom line also surpassed the Zacks Consensus Estimate of $4.89 per share. The outperformance was driven by higher-than-expected revenues from the Power Systems and Distribution segments. Cummins’ revenues totaled $8.46 billion, up from $8.43 billion recorded in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $8.28 billion.
Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar.
Cummins Inc. Price, Consensus and EPS Surprise
Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote
Key Takeaways
In the reported quarter, sales in the Engine segment were down 1% year over year to $2.91 billion. The metric also missed our estimate of $2.94 billion. Sales in North America decreased 2% due to a weaker demand in the North American heavy-duty truck market. International sales increased 4% year over year, driven by strength in global medium-duty truck markets. The segment’s EBITDA rose to $427 million (accounting for 14.7% of sales) from $395 million (13.5% of sales) in the year-ago period and beat our estimate of $399.6 million.
Sales in the Distribution segment totaled $3 billion, which rose 16% year over year and topped our projection of $2.6 billion. Sales in North America increased 13%, while international sales rose 25% due to increased demand for power generation products. The segment’s EBITDA came in at $370 million (12.5% of sales), which increased from the year-ago quarter’s $306 million (12.1% of sales) and surpassed our estimate of $303.4 million.
Sales in the Components segment totaled $2.7 billion, down 16% from the prior-year quarter. Sales also missed our estimate of $2.92 billion. Revenues in North America fell 14% and international sales contracted 18% on the separation of the Atmus business and lower demand in heavy-duty truck. The segment’s EBITDA was $351 million (12.9% of sales), lower than the year-ago figure of $441 million (13.6% of sales). The metric missed our estimate of $410.2 million.
Sales in the Power Systems segment rose 17% from the year-ago quarter to $1.7 billion and beat our estimate of $1.51 billion. While power generation revenues rose 24% on the back of higher global demand (especially for the data center market), industrial revenues were up 7%, thanks to strong mining demand. The segment’s EBITDA rose to $328 million (19.4% of sales) from $234 million (16.2% of sales) and breezed past our estimate of $275.6 million.
Sales in the Accelera segment came in at $110 million, up 7% from the year-ago level but lagged our estimate of $125.3 million. The segment incurred a pretax loss of $115 million, wider than our estimate of $104.7 million. Costs related to the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery electric vehicles, resulted in EBITDA losses.
CMI's Financials & Outlook
Cummins’ cash and cash equivalents were $1.73 billion as of Sept. 30, 2024, down from $2.18 billion on Dec. 31, 2023. Long-term debt totaled $4.86 billion, up from $4.8 billion as of Dec. 31, 2023.
Cummins expects full-year 2024 revenues to be down 3% to flat. EBITDA is now anticipated to be 15.5% compared with the prior guided range of 15-15.5% due to continued improvements in the Power Systems and Distribution segments. Cummins continues to stick to its plan of returning nearly 50% of its operating cash flow to shareholders.
Zacks Rank & Key Picks
CMI currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the auto space are Honda Motor Co., Ltd. (HMC - Free Report) , REE Automotive Ltd. (REE - Free Report) and BYD Company Limited (BYDDY - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for HMC’s fiscal 2025 sales suggests year-over-year growth of 3.33%. Earnings per share (EPS) estimates for fiscal 2025 & 2026 have improved 12 cents and 13 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for REE’s 2024 earnings suggests year-over-year growth of 64.37%. EPS estimates for 2024 and 2025 have improved by $2.98 and $2.75, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 20.91% and 23.63%, respectively. EPS estimates for 2024 and 2025 have improved by 12 cents and 13 cents, respectively, in the past seven days.