Cummins (CMI) to Report Q2 Earnings: What's in the Offing?
Cummins Inc. CMI is slated to release second-quarter 2023 results on Aug 3, before market open. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $5.19 and $8.28 billion, respectively.
For the second quarter, the consensus estimate for CMI’s earnings per share has moved up by 1 cent in the past seven days. Its bottom-line estimates imply a rise of 8.8% from the year-ago reported number.
The Zacks Consensus Estimate for its quarterly revenues suggests a year-over-year rise of 25.7%. Over the trailing four quarters, CMI surpassed earnings estimates on two occasions and missed twice, the average negative surprise being 3.17%. This is depicted in the graph below:
Cummins Inc. Price and EPS Surprise
Cummins Inc. price-eps-surprise | Cummins Inc. Quote
Q1 Highlights
In first-quarter 2023, CMI’s adjusted earnings per share of $5.55 improved substantially from $4.05 in the prior-year quarter. The figure also surpassed the Zacks Consensus Estimate of $4.81.
Cummins’ revenues totaled $8,453 million, up 32.8% from the $6,385 million recorded in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $8,022 million.
Factors to Shape Q2 Results
The Hydrogenic Corp. buyout, investment in Loop Energy and partnership with NPROXX have expanded Cummins’ fuel cell and hydrogen-processing technology capabilities. A partnership with Iberdrola positions Cummins as a leading supplier of electrolyzer systems for large-scale projects in Europe.
Cummins is making significant strides in inorganic growth through the acquisitions of Jacobs Vehicle Systems, Meritor and the Siemens Commercial Vehicles business. The acquisitions and alliances are likely to have acted as a tailwind for Cummins in the to-be-reported quarter.
Here’s a brief look at the revenues and EBITDA estimates for Cummins’ segments.
For the second quarter, our estimate for quarterly sales of the Engine segment is pegged at $2,985.6 million, suggesting a rise from $2,775 million reported in second-quarter 2022. Our estimate for the segment’s EBITDA is $433.8 million, implying an increase from $422 recorded in the same quarter of 2022.
For the second quarter, our estimate for sales from the Distribution segment is $2,460.8 million, indicating a rise from year-ago sales of $2,253. Our forecast for the segment’s EBITDA is $303.5 million, suggesting a rise from $297 reported in the second quarter of 2022.
For the quarter under discussion, we expect net sales from the Power System segment to be $1,390.8 million, suggesting a rise from $1,203 million recorded in second-quarter 2022. Our forecast for the segment’s EBITDA is $176.9 million, implying a rise from $128 million generated in the same quarter of 2022.
Our projection of $3,287 million for the Components segment’s quarterly net sales implies an increase from $1,950 million in the second quarter of 2022. Our estimate for the segment’s EBITDA is pegged at $470.3 million, indicating a rise from $352 million recorded in second-quarter 2022.
Earnings Whispers
Our proven model predicts an earnings beat for Cummins for the quarter to be reported, as it has 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.
Earnings ESP: CMI has an Earnings ESP of +0.82%. This is because the Most Accurate Estimate is pegged 5 cents higher 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.
Other Stocks With the Favorable Combination
Let’s take a look at some other players from the auto space that, according to our model, have the right combination of elements to post an earnings beat for the respective quarters to be reported:
American Axle & Manufacturing Holdings, Inc. AXL will release second-quarter 2023 results on Aug 4. The company has an Earnings ESP of +14.87% and carries a Zacks Rank #3.
The Zacks Consensus Estimate for American Axle’s to-be-reported quarter’s earnings and revenues is pegged at 7 cents per share and $1.56 billion, respectively. AXL surpassed earnings estimates in three of the trailing four quarters and missed once, the average negative surprise being 153.99%.
Magna International MGA will release second-quarter 2023 results on Aug 4. The company has an Earnings ESP of +1.06% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Magna’s to-be-reported quarter’s earnings and revenues is pegged at $1.25 per share and $10.17 billion, respectively. MGA surpassed earnings estimates in one of the trailing four quarters and missed thrice, the average negative surprise being 6.46%.
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Cummins Inc. (CMI) : Free Stock Analysis Report
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