Update Cummins (CMI) in my Jubak’s Picks portfolio
Cummins (CMI) has sold off today—the shares were down 4.3% at the close–after it reported earnings of $2.38 a share and revenue of $4.47 billion for the company’s first quarter.
Those earnings were 18 cents a share above the Wall Street consensus. Revenues were slightly above the Wall Street projection of $4.41 billion.
And the stock sold off?
Three reasons for that, I think.
First, normal sell-on-the-news profit taking. Shares of Cummins were up 32% for 2012 as of the close on April 30. (Cummins is a member of my Jubak’s Picks 12-18 month portfolio http://jubakpicks.com/the-jubak-picks/ .)
Second, a normal what-have-you-done-for-me-lately sell. Read more
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)
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
Update Cummins (CMI)
The heavy truck replacement cycle continues to play out exactly as Cummins (CMI) has outlined it over the last year.
The pent-up demand created during the Great Recession when truck owners put off replacing aging trucks will turn into new orders as the economy recovers with the big pickup in orders due for the first half of 2011, the company has repeatedly said.
If there’s indeed any problem with Cummins’ projections, it may be that the company underestimated the increase in orders and was conservative on timing. Read more
