Cummins Inc.
CMI
reported fourth-quarter 2021 earnings of $2.85 per share, declining from $3.36 recorded in the year-ago period and lagging the Zacks Consensus Estimate of $3.08. Weaker-than-expected contribution across all but the Distribution segment resulted in the underperformance. Cummins’ revenues totaled $5,850 million, slightly up from $5,830 million recorded in the fourth quarter of 2020. The top line, however, fell short of the Zacks Consensus Estimate of $5,783 million.
Key Takeaways
For the reported quarter, sales for the
Engine
segment were up 4% year over year to $2,426 million. The segment’s EBITDA fell to $264 million (accounting for 10.9% of sales) from the prior year’s $338 million (14.5% of sales). The metric also fell short of the Zacks Consensus Estimate of $305 million. On-highway and Off-highway revenues climbed 5% and 2%, respectively, from the prior-year quarter. Sales declined 4% in North America but jumped 26% in international markets driven by higher demand across Australia, Europe and Latin America.
Sales for the
Distribution
segment totaled $2,058 million, up 3% year over year. Revenues from North America inched down 1%, while international sales soared 10% from the year-ago quarter. The segment’s EBITDA came in at $178 million (8.6% of sales), up from the previous year’s $165 million (8.3% of sales). The metric also outpaced the consensus mark of $169 million. This was on account of increased engine and aftermarket demand.
Sales for the
Components
segment were down 6% from the prior-year quarter to $1,726 million. Sales in North America were up 1%, while the same in international markets decreased 12% on a year-over-year basis amid weak demand from China. The segment’s EBITDA was $205 million (11.9% of sales) compared with the year-ago figure of $280 million (15.3% of sales). The metric also missed the Zacks Consensus Estimate of $227 million.
Sales for the
Power Systems
segment rose 10% from the year-ago quarter to $1,086 million. The segment’s EBITDA increased to $97 million (8.9% of sales) from $74 million (7.5% of sales) registered in the year-ago period but lagged the consensus mark of $114 million. Power generation revenues declined 6% year over year, while industrial revenues surged 37% owing to stronger demand in mining markets.
Sales for the
New Power
segment came in at $34 million, unchanged from the year-ago level. The segment incurred a pretax loss of $54 million amid high product and technology-related expenses. The loss was wider than the consensus mark of $31.5 million.
Cummins’ cash and cash equivalents were $2,592 million as of Dec 31, 2021, down from $3,401 million on Dec 31, 2020. Long-term debt totaled $3,579 million, down from $3,610 million on Dec 31, 2020.
Cummins expects 2022 revenues to grow 6% year over year. EBITDA is envisioned at 15.5% of sales.
Zacks Rank & Key Picks
Cummins currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the auto space include
General Motors
GM
,
Tesla
TSLA
and
Goodyear Tire
GT
, each sporting a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here
.
General Motors has an expected sales growth rate of 18.8% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised 22 cents upward in the past 30 days.
General Motors’ earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 46.07%, on average. GM has inched up 1.5% in the past six months.
Tesla has an expected sales growth rate of 50.8% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised 31 cents upward in the past seven days.
Tesla’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 33.26%, on average. TSLA has increased 27.4% in the past year.
Goodyear has an expected sales growth rate of 11% for 2022. The Zacks Consensus Estimate for its 2022 earnings has been revised 5 cents upward in the past seven days.
Goodyear’s earnings beat the Zacks Consensus Estimate in the last four quarters, delivering an earnings surprise of 228.45%, on average. GT has rallied 46.2% in the past year.
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