What happened

It's earnings season on Wall Street, and industrial stocks are on deck. This morning, engine maker Cummins (CMI 1.72%) reported its first-quarter 2020 results. Its stock popped more than 10% in early trading and remains up 8.9% as of 10:30 a.m. EDT.

Cummins reported earning $3.18 per share (pro forma) on sales of $5 billion for the quarter, both numbers ahead of the $2.16 on $4.9 billion in sales that analysts had predicted.

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So what

As calculated under generally accepted accounting principles (GAAP), Cummins earned $3.41 per share, better than its pro forma numbers.

Now for the bad news: Although Cummins beat expectations in Q1, its numbers were still weighed down by the COVID-19-created recession. Sales dropped 17% year over year from last year's $6 billion, and profits per diluted share declined 19% from the $4.20 earned a year ago.

Cummins noted that "lower truck production in North America and weaker demand in global construction, mining, and power generation markets drove the majority of the revenue decrease," and this was a global decline, with sales in North America down 16% and in the rest of the world, 17%.

Now what

Looking ahead, Cummins CEO Tom Linebarger said he is "continuing to take actions to reduce cost and boost our already strong liquidity," noting that "during our 100-year history, we have encountered several unforeseen crises, and I am confident we will successfully navigate this one as we have done before, to emerge stronger."

Management cited "uncertainty related to the coronavirus pandemic" in declining to provide "revenue or profitability guidance for 2020." Long term, however, analysts predict that after COVID-19 is past, Cummins can grow earnings at about 12% annually over the next five years. At a mere 10.7 times trailing earnings, that seems more than fast enough growth to justify the stock's current share price.