Cummins Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Cummins (NYSE:CMI) will unveil its latest earnings tomorrow, Tuesday, July 31, 2012. Cummins is a company engaged in the design, manufacturing, and distribution of diesel and natural gas engines and related technologies. Its services to markets worldwide include electric power generation systems and engine-related component products.

Cummins Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of $2.27 per share, a decline of 5.8% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from $2.71. Between one and three months ago, the average estimate moved up. It has dropped from $2.74 during the last month. Analysts are projecting profit to rise by 2.8% versus last year to $9.17.

Past Earnings Performance: The company has beaten estimates the last two quarters and is coming off a quarter where it topped the forecasts by 16 cents, reporting profit of $2.38 per share against a mean estimate of net income of $2.22. In the fourth quarter of the last fiscal year, the company exceeded forecasts by 32 cents with profit of $2.56 versus a mean estimate of net income of $2.24.

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A Look Back: In the first quarter, profit rose 32.7% to $455 million ($2.38 a share) from $343 million ($1.75 a share) the year earlier, exceeding analyst expectations. Revenue rose 15.9% to $4.47 billion from $3.86 billion.

Stock Price Performance: Between April 30, 2012 and July 27, 2012, the stock price fell $25.67 (-21.7%), from $118.29 to $92.62. The stock price saw one of its best stretches over the last year between October 3, 2011 and October 11, 2011, when shares rose for seven straight days, increasing 18.2% (+$14.74) over that span. It saw one of its worst periods between November 14, 2011 and November 25, 2011 when shares fell for nine straight days, dropping 13.4% (-$13.37) over that span.

Wall St. Revenue Expectations: Analysts are projecting a decline of 3.7% in revenue from the year-earlier quarter to $4.47 billion.

Analyst Ratings: There are mostly holds on the stock with eight of 13 analysts surveyed giving that rating.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.02 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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