Cummins Q3 Earnings Surpass Expectations, Revenues Rise Y/Y

Cummins Inc. CMI reported third-quarter 2024 earnings of $5.60 per share, which increased from $4.73 recorded in the corresponding quarter of 2023. The bottom line also surpassed the Zacks Consensus Estimate of $4.89 per share. The outperformance was driven by higher-than-expected revenues from the Power Systems and Distribution segments. Cummins’ revenues totaled $8.46 billion, up from $8.43 billion recorded in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $8.28 billion.Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar.Cummins Inc. Price, Consensus and EPS Surprise Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. QuoteKey TakeawaysIn the reported quarter, sales in the Engine segment were down 1% year over year to $2.91 billion. The metric also missed our estimate of $2.94 billion. Sales in North America decreased 2% due to a weaker demand in the North American heavy-duty truck market. International sales increased 4% year over year, driven by strength in global medium-duty truck markets. The segment’s EBITDA rose to $427 million (accounting for 14.7% of sales) from $395 million (13.5% of sales) in the year-ago period and beat our estimate of $399.6 million.Sales in the Distribution segment totaled $3 billion, which rose 16% year over year and topped our projection of $2.6 billion. Sales in North America increased 13%, while international sales rose 25% due to increased demand for power generation products. The segment’s EBITDA came in at $370 million (12.5% of sales), which increased from the year-ago quarter’s $306 million (12.1% of sales) and surpassed our estimate of $303.4 million.Sales in the Components segment totaled $2.7 billion, down 16% from the prior-year quarter. Sales also missed our estimate of $2.92 billion. Revenues in North America fell 14% and international sales contracted 18% on the separation of the Atmus business and lower demand in heavy-duty truck. The segment’s EBITDA was $351 million (12.9% of sales), lower than the year-ago figure of $441 million (13.6% of sales). The metric missed our estimate of $410.2 million.Sales in the Power Systems segment rose 17% from the year-ago quarter to $1.7 billion and beat our estimate of $1.51 billion. While power generation revenues rose 24% on the back of higher global demand (especially for the data center market), industrial revenues were up 7%, thanks to strong mining demand. The segment’s EBITDA rose to $328 million (19.4% of sales) from $234 million (16.2% of sales) and breezed past our estimate of $275.6 million.Sales in the Accelera segment came in at $110 million, up 7% from the year-ago level but lagged our estimate of $125.3 million. The segment incurred a pretax loss of $115 million, wider than our estimate of $104.7 million. Costs related to the development of electric powertrains, fuel cells and electrolyzers, as well as products to support battery electric vehicles, resulted in EBITDA losses.CMI's Financials & OutlookCummins’ cash and cash equivalents were $1.73 billion as of Sept. 30, 2024, down from $2.18 billion on Dec. 31, 2023. Long-term debt totaled $4.86 billion, up from $4.8 billion as of Dec. 31, 2023.Cummins expects full-year 2024 revenues to be down 3% to flat. EBITDA is now anticipated to be 15.5% compared with the prior guided range of 15-15.5% due to continued improvements in the Power Systems and Distribution segments. Cummins continues to stick to its plan of returning nearly 50% of its operating cash flow to shareholders.Zacks Rank & Key PicksCMI currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks in the auto space are Honda Motor Co., Ltd. HMC, REE Automotive Ltd. REE and BYD Company Limited BYDDY, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for HMC’s fiscal 2025 sales suggests year-over-year growth of 3.33%. Earnings per share (EPS) estimates for fiscal 2025 & 2026 have improved 12 cents and 13 cents, respectively, in the past 60 days. The Zacks Consensus Estimate for REE’s 2024 earnings suggests year-over-year growth of 64.37%. EPS estimates for 2024 and 2025 have improved by $2.98 and $2.75, respectively, in the past 60 days.The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 20.91% and 23.63%, respectively. EPS estimates for 2024 and 2025 have improved by 12 cents and 13 cents, respectively, in the past seven days.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cummins Inc. (CMI): Free Stock Analysis Report Honda Motor Co., Ltd. (HMC): Free Stock Analysis Report REE Automotive Ltd. (REE): Free Stock Analysis Report Byd Co., Ltd. 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