The 10-second takeaway
For the quarter ended June 30 (Q2), Cummins beat expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased slightly. GAAP earnings per share dropped.
Margins shrank across the board.
Cummins reported revenue of $4.53 billion. The 16 analysts polled by S&P Capital IQ hoped for revenue of $4.25 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.
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 $2.20. The 19 earnings estimates compiled by S&P Capital IQ anticipated $2.00 per share. GAAP EPS of $2.20 for Q2 were 11% lower than the prior-year quarter's $2.47 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 25.5%, 170 basis points worse than the prior-year quarter. Operating margin was 11.1%, 100 basis points worse than the prior-year quarter. Net margin was 9.1%, 140 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $4.33 billion. On the bottom line, the average EPS estimate is $2.11.
Next year's average estimate for revenue is $17.06 billion. The average EPS estimate is $7.93.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Cummins is outperform, with an average price target of $123.88.
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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.