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Cummins Inc. (CMI - Free Report) reported first-quarter 2023 earnings of $5.55 per share, which reflects an improvement from the prior-year quarter earnings of $4.04 per share. The reported figure also surpassed the Zacks Consensus Estimate of $4.81. Higher-than-expected EBITDA in the Engine, Components, Distribution and Power Systems segments resulted in the outperformance. Cummins’ revenues totaled $8,453 million, up 32.3% from $6,385 million recorded in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $8,022 million.
In the reported quarter, sales in the Engine segment were up 8% year over year to $2,986 million. The metric topped the Zacks Consensus Estimate of $2,933 million. The segment’s EBITDA increased to $457 million (accounting for 15.3% of sales) from $390 million (14.2% of sales) and came ahead of the Zacks Consensus Estimate of $441 million. On-highway revenues climbed 9%, driven by pricing actions and strong demand in the North American truck markets, strong aftermarket demand and smart pricing actions. Off-highway revenues rose 6.2%. Sales increased 9% in North America and 8% in international markets.
Sales in the Distribution segment totaled $2,406 million, up 14% year over year and beat the consensus mark of $2,273 million. The segment’s EBITDA came in at $335 million (13.9% of sales), up from the previous year’s $110 million (5.2% of sales). Also, the metric surpassed the consensus mark of $209 million. Revenues from North America jumped 24%, while international sales plunged 5%. Higher revenues were driven by increased demand for parts and services and smart pricing actions.
Sales in the Components segment were up 79% from the prior-year quarter to $3,557 million and surpassed the consensus mark of $3,237 million. Sales in North America were up 87%, while the same in international markets increased 69%, thanks to the Meritor buyout. The segment’s EBITDA was $507 million (14.3% of sales) compared with the year-ago figure of $320 million (16.1% of sales). The metric surpassed the Zacks Consensus Estimate of $472 million.
Sales in the Power Systems segment rose 16% from the year-ago quarter to $1,343 million, topping the consensus mark of $1,306 million. The segment’s EBITDA increased to $219 million (13.9% of sales) from $90 million (7.8% of sales) and beat the consensus mark of $160 million. Power generation and industrial revenues were up 16%.
Sales in the Accelera segment came in at $85 million, soaring 174% from the year-ago level and outperforming the consensus metric of $68 million. The segment incurred a pretax loss of $94 million, which was wider than the consensus mark of $68 million.
Financials
Cummins’ cash and cash equivalents were $1,980 million as of Mar 31, 2023, down from $2,101 million on Dec 31, 2022. Long-term debt totaled $4,409 million, down from $4,498 million on Dec 31, 2022.
2023 Outlook Lifted
Cummins now expects revenues to grow in the range of 15-20% year over year, up from the prior projection of 12%-17%. EBITDA is forecast to be in the range of 15-15.7% of sales, higher than the previous forecast of 14.5%-15.2%. Cummins continues to stick to its plan of returning nearly 50% of its operating cash flow to shareholders in the form of dividends and share repurchases.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported first-quarter 2023 earnings of 85 cents per share, down from the year-ago figure of $1.07 but outpaced the Zacks Consensus Estimate of 83 cents. This marked the ninth straight quarter of earnings beat for the electric vehicle behemoth. Higher-than-expected revenues from its Energy Generation/Storage and Services/Other segments resulted in this outperformance.
Total revenues came in at $23,329 million, witnessing year-over-year growth of 24%. However, the top line missed the consensus mark of $23,472 million. Tesla reported an overall gross margin of 19.3% for the reported quarter. The operating margin came in at 11.4%. Management stuck to its target of around 50% growth in deliveries in the foreseeable future. For 2023, it expects deliveries to reach 1.8 million units.
General Motors (GM - Free Report) reported first-quarter 2023 adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $1.64. Higher-than-expected operating profits from GMNA, GMI and Financial segments led to the outperformance. The bottom line also rose from the year-ago quarter’s earnings of $2.09 per share.
Revenues of $39,985 million beat the Zacks Consensus Estimate of $38,677.9 million and increased from $35,979 million recorded in the year-ago period. However, the company recorded an adjusted EBIT of $3,803 million, lower than $4,044 million in the prior-year quarter. The automaker’s share in the GM market was 8.6% in the reported quarter, down from the year-ago quarter’s 9%.
PACCAR’s (PCAR - Free Report) earnings of $2.25 per share for first-quarter 2023 beat the Zacks Consensus Estimate of $1.82 and rocketed 95.6% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance. Consolidated revenues (including trucks and financial services) came in at $8,473.3 million, up from $6,472.6 million recorded in the corresponding quarter of 2022.
PACCAR’s cash and marketable debt securities amounted to $5,922.2 million as of Mar 31, 2023, compared with $6,158.9 million on Dec 31, 2022. The company paid cash dividends of 25 cents per share during the reported quarter. Capex and R&D expenses for 2023 are envisioned in the band of $600-$650 million and $380-$420 million, respectively.
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Cummins (CMI) Q1 Earnings & Sales Beat, 2023 View Raised
Cummins Inc. (CMI - Free Report) reported first-quarter 2023 earnings of $5.55 per share, which reflects an improvement from the prior-year quarter earnings of $4.04 per share. The reported figure also surpassed the Zacks Consensus Estimate of $4.81. Higher-than-expected EBITDA in the Engine, Components, Distribution and Power Systems segments resulted in the outperformance. Cummins’ revenues totaled $8,453 million, up 32.3% from $6,385 million recorded in the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $8,022 million.
Cummins currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 up 8% year over year to $2,986 million. The metric topped the Zacks Consensus Estimate of $2,933 million. The segment’s EBITDA increased to $457 million (accounting for 15.3% of sales) from $390 million (14.2% of sales) and came ahead of the Zacks Consensus Estimate of $441 million. On-highway revenues climbed 9%, driven by pricing actions and strong demand in the North American truck markets, strong aftermarket demand and smart pricing actions. Off-highway revenues rose 6.2%. Sales increased 9% in North America and 8% in international markets.
Sales in the Distribution segment totaled $2,406 million, up 14% year over year and beat the consensus mark of $2,273 million. The segment’s EBITDA came in at $335 million (13.9% of sales), up from the previous year’s $110 million (5.2% of sales). Also, the metric surpassed the consensus mark of $209 million. Revenues from North America jumped 24%, while international sales plunged 5%. Higher revenues were driven by increased demand for parts and services and smart pricing actions.
Sales in the Components segment were up 79% from the prior-year quarter to $3,557 million and surpassed the consensus mark of $3,237 million. Sales in North America were up 87%, while the same in international markets increased 69%, thanks to the Meritor buyout. The segment’s EBITDA was $507 million (14.3% of sales) compared with the year-ago figure of $320 million (16.1% of sales). The metric surpassed the Zacks Consensus Estimate of $472 million.
Sales in the Power Systems segment rose 16% from the year-ago quarter to $1,343 million, topping the consensus mark of $1,306 million. The segment’s EBITDA increased to $219 million (13.9% of sales) from $90 million (7.8% of sales) and beat the consensus mark of $160 million. Power generation and industrial revenues were up 16%.
Sales in the Accelera segment came in at $85 million, soaring 174% from the year-ago level and outperforming the consensus metric of $68 million. The segment incurred a pretax loss of $94 million, which was wider than the consensus mark of $68 million.
Financials
Cummins’ cash and cash equivalents were $1,980 million as of Mar 31, 2023, down from $2,101 million on Dec 31, 2022. Long-term debt totaled $4,409 million, down from $4,498 million on Dec 31, 2022.
2023 Outlook Lifted
Cummins now expects revenues to grow in the range of 15-20% year over year, up from the prior projection of 12%-17%. EBITDA is forecast to be in the range of 15-15.7% of sales, higher than the previous forecast of 14.5%-15.2%. Cummins continues to stick to its plan of returning nearly 50% of its operating cash flow to shareholders in the form of dividends and share repurchases.
Key Releases From the Auto Space
Tesla (TSLA - Free Report) reported first-quarter 2023 earnings of 85 cents per share, down from the year-ago figure of $1.07 but outpaced the Zacks Consensus Estimate of 83 cents. This marked the ninth straight quarter of earnings beat for the electric vehicle behemoth. Higher-than-expected revenues from its Energy Generation/Storage and Services/Other segments resulted in this outperformance.
Total revenues came in at $23,329 million, witnessing year-over-year growth of 24%. However, the top line missed the consensus mark of $23,472 million. Tesla reported an overall gross margin of 19.3% for the reported quarter. The operating margin came in at 11.4%. Management stuck to its target of around 50% growth in deliveries in the foreseeable future. For 2023, it expects deliveries to reach 1.8 million units.
General Motors (GM - Free Report) reported first-quarter 2023 adjusted earnings of $2.21 per share, surpassing the Zacks Consensus Estimate of $1.64. Higher-than-expected operating profits from GMNA, GMI and Financial segments led to the outperformance. The bottom line also rose from the year-ago quarter’s earnings of $2.09 per share.
Revenues of $39,985 million beat the Zacks Consensus Estimate of $38,677.9 million and increased from $35,979 million recorded in the year-ago period. However, the company recorded an adjusted EBIT of $3,803 million, lower than $4,044 million in the prior-year quarter. The automaker’s share in the GM market was 8.6% in the reported quarter, down from the year-ago quarter’s 9%.
PACCAR’s (PCAR - Free Report) earnings of $2.25 per share for first-quarter 2023 beat the Zacks Consensus Estimate of $1.82 and rocketed 95.6% from the year-ago figure. Higher-than-expected pretax income from Trucks, Parts and Financial Services segments resulted in the outperformance. Consolidated revenues (including trucks and financial services) came in at $8,473.3 million, up from $6,472.6 million recorded in the corresponding quarter of 2022.
PACCAR’s cash and marketable debt securities amounted to $5,922.2 million as of Mar 31, 2023, compared with $6,158.9 million on Dec 31, 2022. The company paid cash dividends of 25 cents per share during the reported quarter. Capex and R&D expenses for 2023 are envisioned in the band of $600-$650 million and $380-$420 million, respectively.