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Why an Earnings Surprise is Likely for Cummins (CMI) in Q2
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Cummins Inc. (CMI - Free Report) is slated to release second-quarter 2022 results on Aug 2, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $4.37 per share and $6.48 billion, respectively.
The Zacks Consensus Estimate for Cummins’ second-quarter earnings per share has been revised downward by 10 cents in the past 30 days. The bottom-line projection, however, implies year-over-year growth of 5.3%. The top-line projection implies a year-over-year increase of 6%.
Cummins posted better-than-expected earnings in the last reported quarter on the back of higher-than-anticipated EBITDA in the Engine segment. Over the trailing four quarters, Cummins beat earnings estimates on two occasions for as many misses, with the average negative surprise being 0.24%.
Let’s see how things have shaped up prior to second-quarter 2022 results.
Our proven model predicts an earnings beat for Cummins for the to-be-reported quarter, 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: Cummins has an Earnings ESP of +0.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Technology leadership, impressive product portfolio, strong geographic diversification and broad global distribution network are expected to aid Cummins’ second-quarter 2022 results. Higher year-over-year demand for Cummins’ products in North America and international markets is likely to have aided revenues during the to-be-reported quarter. Yet, high commodity, labor and logistics costs are likely to have clipped margins. Also, high capex and R&D expenses incurred by Cummins in an effort to ramp up its capabilities in fuel cell and hydrogen production technology are anticipated to have acted as a spoilsport.
Here’s a rundown of second-quarter revenue and EBITDA estimates for Cummins’ segments.
The Zacks Consensus Estimate for Cummins’ Engine segment’s quarterly net sales is pegged at $2,665 million, suggesting an increase from the year-ago quarter’s $2,491 million. However, the consensus mark for EBITDA is $381 million, implying a year-over-year decline of 5.2%.
For the quarter ended June, the Zacks Consensus Estimate for the Distribution segment’s net sales is $2,110 million, indicating an uptick from $1,920 million generated in the comparable year-ago quarter. The same for the segment’s EBITDA is $217 million, indicating an increase from the year-ago reported figure of $201 million.
For the quarter under discussion, the Zacks Consensus Estimate for net sales from the Power System segment is $1,213 million, suggesting growth from $1,143 million recorded in second-quarter 2021. The consensus mark for the segment’s EBITDA is $136 million, implying a decrease from $139 million reported in the corresponding quarter of 2021.
The Zacks Consensus Estimate of $2,063 million for the Components segment’s quarterly net sales calls for an increase from the year-ago quarter’s $1,994 million. The consensus estimate for the segment’s EBITDA is $329 million, which indicates a rise from $301 million recorded in first-quarter 2021.
For the New Power Segment, the consensus estimate for revenues is $48 million, indicating a rise from $24 million recorded in the corresponding quarter of 2021. The consensus mark for pretax loss is pegged at $73 million, indicating a deterioration from the year-ago reported loss of $60 million.
Other Stocks With Favorable Combination
Here are a few other stocks in the auto sector that are worth considering, as these too have the right combination of elements to come up with an earnings beat this time around:
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 3.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.35 per share and $698 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with the average being 11.7%.
Rivian Automotive (RIVN - Free Report) has an Earnings ESP of +9.58% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 11.
The Zacks Consensus Estimate for Rivian’s to-be-reported quarter’s bottom and top line is pegged at a loss of $1.67 per share and $337.7 million, respectively. Over the trailing three quarters, Rivian has outpaced earnings estimates twice and missed once, the average negative surprise being 4.52%.
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Why an Earnings Surprise is Likely for Cummins (CMI) in Q2
Cummins Inc. (CMI - Free Report) is slated to release second-quarter 2022 results on Aug 2, before the opening bell. The Zacks Consensus Estimate for the quarter’s earnings and revenues is pegged at $4.37 per share and $6.48 billion, respectively.
The Zacks Consensus Estimate for Cummins’ second-quarter earnings per share has been revised downward by 10 cents in the past 30 days. The bottom-line projection, however, implies year-over-year growth of 5.3%. The top-line projection implies a year-over-year increase of 6%.
Cummins posted better-than-expected earnings in the last reported quarter on the back of higher-than-anticipated EBITDA in the Engine segment. Over the trailing four quarters, Cummins beat earnings estimates on two occasions for as many misses, with the average negative surprise being 0.24%.
Let’s see how things have shaped up prior to second-quarter 2022 results.
Cummins Inc. Price and EPS Surprise
Cummins Inc. price-eps-surprise | Cummins Inc. Quote
Earnings Whispers
Our proven model predicts an earnings beat for Cummins for the to-be-reported quarter, 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: Cummins has an Earnings ESP of +0.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cummins currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors at Play
Technology leadership, impressive product portfolio, strong geographic diversification and broad global distribution network are expected to aid Cummins’ second-quarter 2022 results. Higher year-over-year demand for Cummins’ products in North America and international markets is likely to have aided revenues during the to-be-reported quarter. Yet, high commodity, labor and logistics costs are likely to have clipped margins. Also, high capex and R&D expenses incurred by Cummins in an effort to ramp up its capabilities in fuel cell and hydrogen production technology are anticipated to have acted as a spoilsport.
Here’s a rundown of second-quarter revenue and EBITDA estimates for Cummins’ segments.
The Zacks Consensus Estimate for Cummins’ Engine segment’s quarterly net sales is pegged at $2,665 million, suggesting an increase from the year-ago quarter’s $2,491 million. However, the consensus mark for EBITDA is $381 million, implying a year-over-year decline of 5.2%.
For the quarter ended June, the Zacks Consensus Estimate for the Distribution segment’s net sales is $2,110 million, indicating an uptick from $1,920 million generated in the comparable year-ago quarter. The same for the segment’s EBITDA is $217 million, indicating an increase from the year-ago reported figure of $201 million.
For the quarter under discussion, the Zacks Consensus Estimate for net sales from the Power System segment is $1,213 million, suggesting growth from $1,143 million recorded in second-quarter 2021. The consensus mark for the segment’s EBITDA is $136 million, implying a decrease from $139 million reported in the corresponding quarter of 2021.
The Zacks Consensus Estimate of $2,063 million for the Components segment’s quarterly net sales calls for an increase from the year-ago quarter’s $1,994 million. The consensus estimate for the segment’s EBITDA is $329 million, which indicates a rise from $301 million recorded in first-quarter 2021.
For the New Power Segment, the consensus estimate for revenues is $48 million, indicating a rise from $24 million recorded in the corresponding quarter of 2021. The consensus mark for pretax loss is pegged at $73 million, indicating a deterioration from the year-ago reported loss of $60 million.
Other Stocks With Favorable Combination
Here are a few other stocks in the auto sector that are worth considering, as these too have the right combination of elements to come up with an earnings beat this time around:
Allison Transmission (ALSN - Free Report) has an Earnings ESP of +0.28% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 3.
The Zacks Consensus Estimate for Allison’s to-be-reported quarter’s earnings and revenues is pegged at $1.35 per share and $698 million, respectively. Encouragingly, ALSN surpassed earnings estimates in the last four quarters, with the average being 11.7%.
Rivian Automotive (RIVN - Free Report) has an Earnings ESP of +9.58% and a Zacks Rank #3. The stock is set to report second-quarter 2022 earnings on Aug 11.
The Zacks Consensus Estimate for Rivian’s to-be-reported quarter’s bottom and top line is pegged at a loss of $1.67 per share and $337.7 million, respectively. Over the trailing three quarters, Rivian has outpaced earnings estimates twice and missed once, the average negative surprise being 4.52%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.