Cummins Inc.


CMI

reported first-quarter 2022 earnings of $4.04 per share, flat year over year. The figure topped the Zacks Consensus Estimate of $3.55. Higher-than-expected EBITDA in the Engine segment resulted in the outperformance. Cummins’ revenues totaled $6,385 million, up from $6,092 million recorded in the year-ago quarter. The top line beat Zacks Consensus Estimate of $6,026 million.

Key Takeaways

In the reported quarter, sales in the

Engine

segment were up 12% year over year to $2,753 million. The segment’s EBITDA rose to $392 million (accounting for 14.2% of sales) from $354 million (14.4% of sales). The metric also crossed the Zacks Consensus Estimate of $328 million. On-highway and Off-highway revenues climbed 14% and 5%, respectively, from the prior-year quarter. Sales increased 15% in North America and 4% in international markets.

Sales in the

Distribution

segment totaled $2,117 million, up 15% year over year. Revenues from North America jumped 17%, while international sales soared 13%. The segment’s EBITDA came in at $110 million (5.2% of sales), sharply down from the previous year’s $160 million (8.7% of sales). The metric also missed the consensus mark of $163 million. This was on account of the suspension of activities in Russia.

Sales in the

Components

segment were down 8% from the prior-year quarter to $1,988 million. Sales in North America were up 8%, while the same in international markets decreased 21% amid weak demand from China and India. The segment’s EBITDA was $320 million (16.1% of sales) compared with the year-ago figure of $421 million (19.6% of sales). The metric also missed the Zacks Consensus Estimate of $342 million.

Sales in the

Power Systems

segment rose 14% from the year-ago quarter to $1,160 million. The segment’s EBITDA decreased to $90 million (7.8% of sales) from $126 million (12.3% of sales) and lagged the consensus mark of $117 million. Power generation revenues increased 9% year over year, while industrial revenues soared 21%, owing to stronger demand in mining and oil and gas markets.

Sales in the

New Power

segment came in at $31 million, down 11% from the year-ago level. The segment incurred a pretax loss of $67 million. The loss was wider than the consensus mark of $65 million.

Financials

Cummins’ cash and cash equivalents were $2,276 million as of Mar 31, 2022, down from $2,592 million on Dec 31, 2021. Long-term debt totaled $3,502 million, down from $3,579 million on Dec 31, 2021.

Cummins raised its 2022 guidance for revenues. It expects revenues to grow 8% year over year compared with the previous estimate of 6%. EBITDA forecast remains unchanged at 15.5% of sales.

Zacks Rank & Key Picks

CMI currently carries a Zacks Rank #3 (Hold).

Better-ranked players in the auto space include

BRP Group, Inc.


DOOO

, sporting a Zacks Rank #1 (Strong Buy) and

Dorman Products


DORM

and

Tesla Inc.


TSLA

, each carrying a Zacks Rank #2 (Buy), currently. You can see


the complete list of today’s Zacks #1 Rank stocks here


.

BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.

BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 11% over the past year.

Dorman Products has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.7% upwards in the past 60 days.

Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 2.1% over the past year.

Tesla has an expected earnings growth rate of 66.1% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 18.7% upward in the past 60 days.

Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 41.27%, on average. The stock has gained 31.8% over the past year.

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