The 10-second takeaway
For the quarter ended March 31 (Q1), Cummins met expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue dropped. Non-GAAP earnings per share contracted significantly. GAAP earnings per share shrank significantly.
Margins shrank across the board.
Cummins notched revenue of $3.92 billion. The 14 analysts polled by S&P Capital IQ anticipated a top line of $3.97 billion on the same basis. GAAP reported sales were 12% lower than the prior-year quarter's $4.47 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 $1.44. The 19 earnings estimates compiled by S&P Capital IQ predicted $1.86 per share. Non-GAAP EPS of $1.44 for Q1 were 39% lower than the prior-year quarter's $2.38 per share. GAAP EPS of $1.49 for Q1 were 37% lower than the prior-year quarter's $2.38 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 24.4%, 240 basis points worse than the prior-year quarter. Operating margin was 8.5%, 360 basis points worse than the prior-year quarter. Net margin was 7.2%, 300 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.24 billion. On the bottom line, the average EPS estimate is $2.16.
Next year's average estimate for revenue is $17.17 billion. The average EPS estimate is $8.77.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cummins is outperform, with an average price target of $127.72.
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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 recommends Cummins. The Motley Fool owns shares of 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.