Cummins Q3 Profit Plunges 59%, Still Beats View (CMI)

Created by Dividend.com

Engines maker Cummins Inc. (CMI) said Friday that its third quarter profit plunged 59% from last year, hurt by one-time charges and sharply lower revenue.

The Columbus-based company reported third quarter net income of $95 million, or 48 cents per share, compared with $229 million, or $1.17 per share, in the year-ago period. Excluding one-time charges, adjusted profit was 56 cents per share.

Sales plummeted 31% from last year, to $2.53 billion.

On average, Wall Street analysts expected a much lower profit of just 37 cents per share, on smaller revenue of $2.48 billion.

Cummins shares rose $1.46, or +3.2%, in morning trading Friday.

The Bottom Line
We had removed shares of CMI from our “recommended” list back last Sept.3, when shares traded at $61.72. The company has a dividend yield of 1.52%, based on last night’s closing stock price of $47.03. The stock has technical support in the $40 price area. If the shares can rebound off of this morning’s downgrade, we see overhead resistance around the $49-$53 price levels. We would remain on the sidelines for now.

Cummins Inc. (CMI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

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