The 10-second takeaway
For the quarter ended July 1 (Q2), Cummins met expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped and GAAP earnings per share contracted.
Gross margins improved, operating margins contracted, and net margins dropped.
Cummins booked revenue of $4.45 billion. The three analysts polled by S&P Capital IQ foresaw revenue of $4.46 billion on the same basis. GAAP reported sales were 4.1% lower than the prior-year quarter's $4.64 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.45. The 18 earnings estimates compiled by S&P Capital IQ anticipated $2.27 per share. GAAP EPS of $2.47 for Q2 were 5.0% lower than the prior-year quarter's $2.60 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 27.0%, 110 basis points better than the prior-year quarter. Operating margin was 11.9%, 70 basis points worse than the prior-year quarter. Net margin was 10.5%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $4.42 billion. On the bottom line, the average EPS estimate is $2.19.
Next year's average estimate for revenue is $18.12 billion. The average EPS estimate is $9.23.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cummins is outperform, with an average price target of $127.19.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Cummins. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.