Engine manufacturer Cummins (NYSE: CMI) will be reporting results this Tuesday before market hours. Here’s what you need to know.
Cummins beat analysts’ revenue expectations by 0.6% last quarter, reporting revenues of $8.17 billion, down 2.7% year on year. It was an exceptional quarter for the company, with an impressive beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
Is Cummins a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Cummins’s revenue to decline 4.9% year on year to $8.36 billion, a reversal from the 1.8% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $5.21 per share.
Heading into earnings, analysts covering the company have grown increasingly bearish with revenue estimates seeing 5 downward revisions over the last 30 days (we track 13 analysts). Cummins has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 3% on average.
Looking at Cummins’s peers in the heavy transportation equipment segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Greenbrier delivered year-on-year revenue growth of 2.7%, beating analysts’ expectations by 7.3%, and PACCAR reported a revenue decline of 15.7%, topping estimates by 2.6%. Greenbrier traded up 21.1% following the results while PACCAR was also up 8.9%.
Read our full analysis of Greenbrier’s results here and PACCAR’s results here.
Investors in the heavy transportation equipment segment have had steady hands going into earnings, with share prices flat over the last month. Cummins is up 8.3% during the same time and is heading into earnings with an average analyst price target of $359.56 (compared to the current share price of $355).
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