Cummins (CMI) to report earnings tomorrow: here is what to expect

What happened

Cummins is scheduled to announce earnings Thursday morning. Last quarter, revenue was $9.46 billion, up 9.4% year on year and above analysts’ expectations, while earnings per share and EBITDA, a measure of operating performance, fell short of estimates. Analysts expect revenue to grow 19.7% this quarter.

Confirmed

Global impact / market context

The report will show whether stronger expected revenue growth is translating into earnings. If costs rise faster than sales, profit could disappoint even with higher revenue; another shortfall could also challenge investor confidence, while results above expectations may support the view that demand is improving.

Analyst inference

Analysts generally reaffirmed their estimates over the past 30 days, indicating little change in their published expectations. In the heavy transportation equipment segment, Allison Transmission beat revenue expectations and Douglas Dynamics met them, but their results do not establish how Cummins performed.

Confirmed

What to watch

1. Cummins’s Thursday morning report, especially revenue compared with the expected 19.7% year-on-year growth, will indicate whether the projected sales acceleration materialized. Confirmed
2. Compare earnings per share and EBITDA, a measure of operating performance, with analysts’ estimates; last quarter both measures fell short despite higher revenue. Confirmed
3. Watch whether Cummins explains what is driving sales and costs; stronger sales without improving earnings could suggest that expenses are absorbing much of the growth. Analyst inference

Evidence

• stockstory.org