We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cummins (CMI) Q3 Earnings: Is a Disappointment in Store?
Read MoreHide Full Article
Cummins Inc. (CMI - Free Report) is set to report third-quarter 2016 results on Nov 1. In the last quarter, the company delivered a positive earnings surprise of 11.63%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Cummins has the potential to benefit from its innovative products. The company is also poised to gain from the acquisitions undertaken in North America and expansion through partnerships. It has completed 10 acquisitions in a span of over two years. Together, these factors should favorably impact the company’s performance in the quarter to be reported.
However, Cummins expects revenues to decrease in 2016 due to lower expectations for North American truck production and sluggish demand in global off-highway markets. Projected weakness in truck demand in North America is likely to be a headwind for the Engine segment, while expected weakness in off-highway markets may hurt the Distribution segment this year. These factors are also expected to affect Cummins’ quarterly results.
Earnings Whispers
Our proven model does not conclusively show that Cummins is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Cummins’ Earnings ESP is -1.04% because the Most Accurate estimate stands at $1.91, while the Zacks Consensus Estimate is pegged at $1.93. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
Zacks Rank: Cummins carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Axle & Manufacturing Holdings Inc. (AXL - Free Report) , which is expected to report third-quarter 2016 results on Nov 4, has an Earnings ESP of +5.20% and a Zacks Rank #3.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #2 (Buy). The company is expected to release third-quarter 2016 results on Nov 3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cummins (CMI) Q3 Earnings: Is a Disappointment in Store?
Cummins Inc. (CMI - Free Report) is set to report third-quarter 2016 results on Nov 1. In the last quarter, the company delivered a positive earnings surprise of 11.63%. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Cummins has the potential to benefit from its innovative products. The company is also poised to gain from the acquisitions undertaken in North America and expansion through partnerships. It has completed 10 acquisitions in a span of over two years. Together, these factors should favorably impact the company’s performance in the quarter to be reported.
However, Cummins expects revenues to decrease in 2016 due to lower expectations for North American truck production and sluggish demand in global off-highway markets. Projected weakness in truck demand in North America is likely to be a headwind for the Engine segment, while expected weakness in off-highway markets may hurt the Distribution segment this year. These factors are also expected to affect Cummins’ quarterly results.
Earnings Whispers
Our proven model does not conclusively show that Cummins is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate. Cummins’ Earnings ESP is -1.04% because the Most Accurate estimate stands at $1.91, while the Zacks Consensus Estimate is pegged at $1.93. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
CUMMINS INC Price and EPS Surprise
CUMMINS INC Price and EPS Surprise | CUMMINS INC Quote
Zacks Rank: Cummins carries a Zacks Rank #3 (Hold), which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
American Axle & Manufacturing Holdings Inc. (AXL - Free Report) , which is expected to report third-quarter 2016 results on Nov 4, has an Earnings ESP of +5.20% and a Zacks Rank #3.
Fox Factory Holding Corp (FOXF - Free Report) , which will report third-quarter 2016 financial numbers on Nov 2, has an Earnings ESP of +2.56% and a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Magna International Inc. (MGA - Free Report) has an Earnings ESP of +1.67% and a Zacks Rank #2 (Buy). The company is expected to release third-quarter 2016 results on Nov 3.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>