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Cummins (CMI) to Pay $1.7B Fine Under the Clean Air Act
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Cummins (CMI - Free Report) agreed to pay a $1.67 billion fine for violating the Clean Air Act. Reportedly, the engine manufacturer installed emissions defeat devices on hundreds of thousands of engines. This is the second-highest environmental penalty in the history of the United States.
The Justice Department alleges that Cummins installed defeat devices on 630,000 RAM 2500 and 3500 pickup truck engines from model years 2013 to 2019, plus 330,000 RAM 2500 and 3500s from model years 2019 to 2023.
Cummins did not admit to any wrongdoing and said it has been cooperating with regulators. The company has worked with Stellantis to recall RAM trucks for the model year 2019. It has also initiated a recall for pickups from model year 2013-2019.
Per Merrick Garland, Attorney General of the United States, the devices that Cummins allegedly installed in its engines have an adverse impact on people’s health and safety. The preliminary estimates indicate that defeat devices on some Cummins engines led to thousands of tons of excess emissions of nitrogen oxides. Long-term exposure to this pollutant can lead to breathing issues such as asthma and respiratory infections.
He added that the fine imposed on Cummins should make it clear that the department will remain aggressive in its efforts to hold accountable those who make a profit at the expense of people’s health and safety.
The company anticipates a total charge of $2.04 billion to address the emissions issue. It says that it is financially strong with existing liquidity and access to capital to satisfy obligations.
The Justice Department has partnered with the Environmental Protection Agency (EPA) for this investigation. EPA monitors companies that seek to cheat in emissions tests.
The Zacks Consensus Estimate for STLA’s 2023 sales and earnings indicates year-over-year growth of 12.3% and 11.3%, respectively. The EPS estimates for 2023 and 2024 have increased 4 cents and 3 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 70.6%, respectively. The EPS estimates for 2023 and 2024 have increased 8 cents and 7 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings indicates year-over-year growth of 35.7% and 74.7%, respectively. The EPS estimate for 2023 has increased 62 cents in the past 90 days. The EPS estimate for 2024 has increased by a penny in the past 60 days.
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Cummins (CMI) to Pay $1.7B Fine Under the Clean Air Act
Cummins (CMI - Free Report) agreed to pay a $1.67 billion fine for violating the Clean Air Act. Reportedly, the engine manufacturer installed emissions defeat devices on hundreds of thousands of engines. This is the second-highest environmental penalty in the history of the United States.
The Justice Department alleges that Cummins installed defeat devices on 630,000 RAM 2500 and 3500 pickup truck engines from model years 2013 to 2019, plus 330,000 RAM 2500 and 3500s from model years 2019 to 2023.
Cummins did not admit to any wrongdoing and said it has been cooperating with regulators. The company has worked with Stellantis to recall RAM trucks for the model year 2019. It has also initiated a recall for pickups from model year 2013-2019.
Per Merrick Garland, Attorney General of the United States, the devices that Cummins allegedly installed in its engines have an adverse impact on people’s health and safety. The preliminary estimates indicate that defeat devices on some Cummins engines led to thousands of tons of excess emissions of nitrogen oxides. Long-term exposure to this pollutant can lead to breathing issues such as asthma and respiratory infections.
He added that the fine imposed on Cummins should make it clear that the department will remain aggressive in its efforts to hold accountable those who make a profit at the expense of people’s health and safety.
The company anticipates a total charge of $2.04 billion to address the emissions issue. It says that it is financially strong with existing liquidity and access to capital to satisfy obligations.
The Justice Department has partnered with the Environmental Protection Agency (EPA) for this investigation. EPA monitors companies that seek to cheat in emissions tests.
Zacks Rank & Key Picks
CMI currently carries a Zacks Rank #3 (Hold).
Some better-ranked players in the auto space are Stellantis N.V. (STLA - Free Report) , Volvo (VLVLY - Free Report) , and BYD Company Limited (BYDDY - Free Report) . While STLA currently sports a Zacks Rank #1 (Strong Buy), VLVLY and BYDDY carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for STLA’s 2023 sales and earnings indicates year-over-year growth of 12.3% and 11.3%, respectively. The EPS estimates for 2023 and 2024 have increased 4 cents and 3 cents, respectively, in the past seven days.
The Zacks Consensus Estimate for VLVLY’s 2023 sales and earnings indicates year-over-year growth of 4.2% and 70.6%, respectively. The EPS estimates for 2023 and 2024 have increased 8 cents and 7 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for BYDDY’s 2023 sales and earnings indicates year-over-year growth of 35.7% and 74.7%, respectively. The EPS estimate for 2023 has increased 62 cents in the past 90 days. The EPS estimate for 2024 has increased by a penny in the past 60 days.