Update Cummins (CMI)
So much for any worries about that quarter.
Today, February 2, before the market opened in New York, Cummins (CMI) announced fourth quarter earnings of $2.56 a share (excluding non-recurring items). Cummins is a member of my Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/
That was a 55.4% increase from earnings of $1.84 in the fourth quarter of 2010. The earnings results beat Wall Street estimates by 29 cents a share. (Much of this beat—18 cents—came from a favorable change in the company’s tax rate. But n 11 cents a share surprise isn’t shabby.)
Revenue climbed 19% from the fourth quarter of 2010 to $4.92 billion (versus the Wall Street projection of $4.73 billion.)
For 2012 the company guided analysts to expect revenue growth of 10% or better ($19.85 billion versus the consensus of $19.69 billion) and an EBIT margin (earnings before interest and taxes) of 14.5% to 15%. That works out to 2012 earnings of $9.80 to $10.20 a share versus the Wall Street consensus of $9.81.
Not that every one of Cummins’ business units killed during the quarter. Read more
Update Cummins (CMI)
All those warnings about weakness in the fourth quarter are starting to sound like a pattern. At least I starting to see investors and analysts leap to work building a pattern.
Be careful, though, the warnings are coming from very different directions, which should make it hard to draw larger conclusions about market sectors and the global economy.
Let’s take the October 25 poster child for fourth quarter warnings, Cummins (CMI). (Cummins is a member of my Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/)
That day Cummins announced third quarter earnings of $2.35 a share, beating the Wall Street consensus by 11 cents a share. Read more
Update Cummins (CMI)
It’s not just what Cummins (CMI) told Wall Street analysts on September 13; it’s also that the company said it at all.
I mean Cummins knows there’s a global slowdown going on and yet the company’s CEO and COO got up and said that Cummins would hit $30 billion in annual sales in 2015, up from $18 billion today and a 14% compound annual growth rate. And that EBIT (earnings before interest and taxes) margins would expand to 18% from 14.5% today. And, the capper, that earnings per share would hit $20 in 2015.
That makes today’s share price of $97.56 equal to a 2015 price to earnings ratio of 4.87. You’ve got to wonder why the stock climbed only 6.9% on the news that day. (Cummins is a member of my Jubak’ Picks portfolio http://jubakam.com/portfolios/ )
If you suspect that they’re putting something strange in the water out there in Columbus, Indiana, you’ll be reassured to know that Cummins can actually make a logical case for this optimism. Read more
Update Cummins (CMI)
During the company’s July 26 post-second-quarter-earnings conference call, a Wall Street analyst asked management at Cummins (CMI) the big question: How can business be so strong for Cummins when the global economy has so many problems and when Cummins’ competitors are lowering their forecasts for future growth? (Cummins is a member of my Jubak’s Picks portfolio http://jubakpicks.com/the-jubak-picks/ )
The company said that it sees stronger than expected growth in North America and huge momentum in China even with recent deceleration in the Chinese economy. And that it has managed its inventories of parts and components to avoid the shortages that have dinged competitors such as Paccar (PCAR).
And saying that the company raised its full-year sales outlook to $18 billion from an April forecast of $17 billion and raised projected EBIT (earnings before interest and taxes) margins to 14.5% from 14%. That works out to $8.70 a share in earnings for 2011 against a current Wall Street consensus of $8.14 a share and April guidance of $7.75.
Why should investors believe these guys? Read more
Update Cummins (CMI)
When you get right down to it, yesterday’s (April 26) first quarter earnings report for Cummins (CMI) is very simple, The company raised its guidance for 2011 revenue to $17 billion, up from the earlier guidance of $16 billion, and increased its projected EBIT (earnings before interest and taxes) to 14% from 13.5%. That works out to an increase in projected 2011 earnings to $7.75 a share. That’s an increase from the $7.24 a share that was the Wall Street consensus before the company reported.
To figure out what the stock is worth, you now have to answer just two questions. First, do you think this quarter represents the top of the cycle for this maker of truck engines and backup power systems or is it more like the middle of the cycle with lots of sweet spot still ahead? Second, do you believe the company’s projections?
I think both are easy questions to answer after this quarter. Read more
