Cummins Inc. (CMI) Shares Gap Down Following Weak Earnings

Cummins Inc. (NYSE:CMI)’s share price gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $155.08, but opened at $157.48. Cummins shares last traded at $156.90, with a volume of 1,075,129 shares changing hands.

The company reported $2.53 earnings per share for the quarter, missing analysts’ consensus estimates of $2.58 by $0.05. The business had revenue of $5.08 billion for the quarter, compared to analyst estimates of $4.80 billion. Cummins had a return on equity of 20.67% and a net margin of 8.10%. The business’s revenue was up 12.1% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $2.40 earnings per share.

The firm also recently declared a quarterly dividend, which will be paid on Friday, September 1st. Investors of record on Friday, August 18th will be given a dividend of $1.08 per share. The ex-dividend date of this dividend is Wednesday, August 16th. This is a positive change from Cummins’s previous quarterly dividend of $1.03. This represents a $4.32 dividend on an annualized basis and a yield of 2.70%. Cummins’s payout ratio is presently 46.28%.

CMI has been the topic of a number of analyst reports. Wells Fargo & Company raised shares of Cummins from a “market perform” rating to an “outperform” rating in a research note on Monday, April 17th. Piper Jaffray Companies downgraded shares of Cummins from an “overweight” rating to a “neutral” rating and reduced their target price for the stock from $160.00 to $144.00 in a research note on Tuesday, April 18th. ValuEngine raised shares of Cummins from a “hold” rating to a “buy” rating in a research note on Friday, June 2nd. Stifel Nicolaus reaffirmed a “hold” rating and set a $150.00 target price on shares of Cummins in a research note on Wednesday, April 12th. Finally, Zacks Investment Research raised shares of Cummins from a “hold” rating to a “buy” rating and set a $167.00 price target on the stock in a research note on Wednesday, April 12th. One equities research analyst has rated the stock with a sell rating, eleven have issued a hold rating and seven have issued a buy rating to the stock. Cummins presently has an average rating of “Hold” and a consensus target price of $154.33.

In other news, CFO Pat Ward sold 14,050 shares of the stock in a transaction dated Monday, June 19th. The shares were sold at an average price of $163.95, for a total value of $2,303,497.50. Following the completion of the transaction, the chief financial officer now owns 13,395 shares in the company, valued at approximately $2,196,110.25. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Tony Satterthwaite sold 4,000 shares of the stock in a transaction dated Tuesday, July 25th. The shares were sold at an average price of $169.00, for a total transaction of $676,000.00. Following the completion of the transaction, the insider now owns 41,902 shares of the company’s stock, valued at approximately $7,081,438. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 60,636 shares of company stock valued at $10,000,575. 0.62% of the stock is owned by insiders.

Institutional investors have recently made changes to their positions in the stock. Macquarie Group Ltd. increased its position in shares of Cummins by 49.2% in the fourth quarter. Macquarie Group Ltd. now owns 9,400 shares of the company’s stock worth $1,285,000 after buying an additional 3,100 shares in the last quarter. Chevy Chase Trust Holdings Inc. increased its position in shares of Cummins by 3.7% in the first quarter. Chevy Chase Trust Holdings Inc. now owns 133,730 shares of the company’s stock worth $20,220,000 after buying an additional 4,724 shares in the last quarter. Manning & Napier Advisors LLC increased its position in shares of Cummins by 8.7% in the first quarter. Manning & Napier Advisors LLC now owns 25,883 shares of the company’s stock worth $3,912,000 after buying an additional 2,071 shares in the last quarter. Trust Co bought a new position in shares of Cummins during the fourth quarter worth about $208,000. Finally, Gulf International Bank UK Ltd increased its position in shares of Cummins by 1.0% in the first quarter. Gulf International Bank UK Ltd now owns 51,801 shares of the company’s stock worth $7,832,000 after buying an additional 500 shares in the last quarter. Institutional investors and hedge funds own 80.34% of the company’s stock.

The company has a market capitalization of $26.69 billion, a price-to-earnings ratio of 18.06 and a beta of 1.09. The stock’s 50-day moving average price is $163.10 and its 200 day moving average price is $154.60.

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Cummins Company Profile

Cummins Inc designs, manufactures, distributes and services diesel and natural gas engines and engine-related component products. The Company’s segments include Engine, Distribution, Components and Power Systems. The Engine segment manufactures and markets a range of diesel and natural gas powered engines under the Cummins brand name, as well as certain customer brand names, for the heavy and medium-duty truck, bus, recreational vehicle (RV), light-duty automotive and agricultural markets.

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