On Dec 30, 2013,
(CMI) reached a new 52-week high of $140.49. The surge in stock
price was driven by strength in the fundamentals of the
Cummins posted net earnings of $362 million or $1.94 per share
(excluding special items) in the third quarter of 2013, lagging
the Zacks Consensus Estimate of $2.10 a share. However, the
earnings were higher than $336 million or $1.78 per share
reported in the year-ago quarter.
Revenues in the quarter rose nearly 4% year over year to $4.3
billion, mainly driven by strong demand in North America.
Revenues were in line with the Zacks Consensus Estimate.
Cummins is positioned to benefit from its innovative products.
The company steadily launches new engines to meet the global
market demands and emission standards, and offers enhanced fuel
Moreover, Cummins has the potential to benefit from higher use
of its engines by a number of original equipment manufacturers
Nissan Motor Co. Ltd.
Navistar International Corporation
). Cummins' 5.0L V8 Turbo Diesel engine will be featuring in
Nissan's next-generation full-size Titan pickup truck and Scania
will be using Cummins' ISB engine in bus applications in Europe.
Moreover, Cummins' engine was featured in the constellation truck
of MAN and
Ford Motor Co.
) vehicle in the Brazilian truck show in Fenatran.
Although in 2013 Cummins expects revenues to decline 3% from
the 2012 level, it anticipates revenues in the range of $25-$31
billion by 2018. The company also projects earnings before
interest and taxes (EBIT) in the range of 16%-18% by 2018,
compared with 12.5%-13% projected in 2013.
Currently Cummins carries a Zacks Rank #3 (Hold).
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