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) to Report Q1 Earnings: What's in the Cards?
Read MoreHide Full Article
Cummins Inc. (CMI - Free Report) is set to report first-quarter 2017 results before the market opens on May 2. In the last quarter, the company delivered a positive earnings surprise of 11.39%. In fact, the company has beat estimates in all four trailing quarters, providing an average beat of 8.33%.
Let’s see how things are shaping up for this announcement.
Cummins has the potential to benefit from its innovative product portfolio. The company is poised to gain from the acquisitions made in North America and expansion through partnerships. It has completed more than 13 acquisitions since 2013. At the Distribution segment, revenues for 2017 are expected to be flat or increase 4%. The buyouts completed in the fourth quarter of 2016 are expected to add $200 million or approximately 3% to the top line.
In 2017, revenues from China across all segments, including joint ventures, are expected to increase 3%. Revenues are likely to be driven by strong demand in the heavy and medium-duty truck market. The company expects its share in light-duty market and off-highway markets of China to improve 8% and 5%, respectively.
Cummins is focused on enhancing shareholder value by pursuing aggressive share repurchases and increasing dividend payouts. In 2017, Cummins plans to return 50% of its full-year operating cash flow to shareholders in the form of share repurchases and dividends. However, the company expects to face challenges due to adverse market conditions.
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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Cummins is -0.55% as the Most Accurate estimate is pegged at $1.80 while the Zacks Consensus Estimate stands at $1.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cummins carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
Cummins has marginally underperformed the Zacks categorized Automotive-Internal Combustion Engines industry over the last three months. The company’s share price increased 2.8% over this period while the industry saw a 3.4% gain.
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:
Tenneco Inc. (TEN - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are scheduled to be released on May 1.
Ferrari N.V. (RACE - Free Report) has an Earnings ESP of +5.66% and a Zacks Rank #3. The company is expected to report first-quarter 2017 financial numbers on May 4.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Image: Bigstock
Cummins (CMI) to Report Q1 Earnings: What's in the Cards?
Cummins Inc. (CMI - Free Report) is set to report first-quarter 2017 results before the market opens on May 2. In the last quarter, the company delivered a positive earnings surprise of 11.39%. In fact, the company has beat estimates in all four trailing quarters, providing an average beat of 8.33%.
Let’s see how things are shaping up for this announcement.
Cummins Inc. Price and EPS Surprise
Cummins Inc. Price and EPS Surprise | Cummins Inc. Quote
Factors to Consider
Cummins has the potential to benefit from its innovative product portfolio. The company is poised to gain from the acquisitions made in North America and expansion through partnerships. It has completed more than 13 acquisitions since 2013. At the Distribution segment, revenues for 2017 are expected to be flat or increase 4%. The buyouts completed in the fourth quarter of 2016 are expected to add $200 million or approximately 3% to the top line.
In 2017, revenues from China across all segments, including joint ventures, are expected to increase 3%. Revenues are likely to be driven by strong demand in the heavy and medium-duty truck market. The company expects its share in light-duty market and off-highway markets of China to improve 8% and 5%, respectively.
Cummins is focused on enhancing shareholder value by pursuing aggressive share repurchases and increasing dividend payouts. In 2017, Cummins plans to return 50% of its full-year operating cash flow to shareholders in the form of share repurchases and dividends. However, the company expects to face challenges due to adverse market conditions.
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 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below:
Zacks ESP: The Earnings ESP for Cummins is -0.55% as the Most Accurate estimate is pegged at $1.80 while the Zacks Consensus Estimate stands at $1.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cummins carries a Zacks Rank #2 which increases the predictive power of ESP. However, the company’s negative ESP makes surprise prediction difficult.
We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Price Performance
Cummins has marginally underperformed the Zacks categorized Automotive-Internal Combustion Engines industry over the last three months. The company’s share price increased 2.8% over this period while the industry saw a 3.4% gain.
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:
Delphi Automotive PLC , slated to report first-quarter 2017 results on May 3, has an Earnings ESP of +1.37% and a Zacks Rank #2. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
Tenneco Inc. (TEN - Free Report) has an Earnings ESP of +1.42% and a Zacks Rank #3. The company’s first-quarter 2017 financial results are scheduled to be released on May 1.
Ferrari N.V. (RACE - Free Report) has an Earnings ESP of +5.66% and a Zacks Rank #3. The company is expected to report first-quarter 2017 financial numbers on May 4.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>