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

Cummins Inc. (NYSE:CMI) shares gapped down prior to trading on Wednesday following a dissappointing earnings announcement. 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.

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

The firm also recently announced a quarterly dividend, which will be paid on Friday, September 1st. Stockholders of record on Friday, August 18th will be given a dividend of $1.08 per share. This represents a $4.32 dividend on an annualized basis and a dividend yield of 2.78%. This is a positive change from Cummins’s previous quarterly dividend of $1.03. The ex-dividend date is Wednesday, August 16th. Cummins’s payout ratio is presently 46.28%.

A number of analysts have recently issued reports on CMI shares. Wells Fargo & Company raised Cummins from a “market perform” rating to an “outperform” rating in a research report on Monday, April 17th. Piper Jaffray Companies lowered Cummins from an “overweight” rating to a “neutral” rating and lowered their price objective for the company from $160.00 to $144.00 in a report on Tuesday, April 18th. Barclays PLC boosted their price objective on Cummins from $137.00 to $144.00 and gave the company an “equal weight” rating in a report on Wednesday, April 19th. Jefferies Group LLC reissued a “hold” rating and issued a $160.00 price objective (up from $150.00) on shares of Cummins in a report on Tuesday, May 2nd. Finally, Stifel Nicolaus reissued a “hold” rating and issued a $155.00 price objective (up from $150.00) on shares of Cummins in a report on Wednesday, May 3rd. One investment analyst has rated the stock with a sell rating, eleven have issued a hold rating and seven have assigned a buy rating to the stock. Cummins presently has an average rating of “Hold” and an average price target of $156.21.

In other Cummins news, VP Anant Talaulicar sold 1,650 shares of the business’s stock in a transaction on Tuesday, May 30th. The shares were sold at an average price of $157.50, for a total transaction of $259,875.00. Following the sale, the vice president now directly owns 13,029 shares of the company’s stock, valued at approximately $2,052,067.50. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. Also, Director Franklin R. Changdiaz sold 1,633 shares of the business’s stock in a transaction on Wednesday, August 9th. The shares were sold at an average price of $159.27, for a total transaction of $260,087.91. Following the sale, the director now directly owns 5,814 shares in the company, valued at $925,995.78. The disclosure for this sale can be found here. Insiders sold 60,969 shares of company stock worth $10,053,755 in the last ninety days. 0.62% of the stock is owned by corporate insiders.

A number of hedge funds have recently made changes to their positions in CMI. Pinnacle Bank bought a new position in Cummins during the first quarter valued at approximately $105,000. Carroll Financial Associates Inc. boosted its position in Cummins by 13.4% in the second quarter. Carroll Financial Associates Inc. now owns 702 shares of the company’s stock valued at $113,000 after buying an additional 83 shares in the last quarter. Cohen Capital Management Inc. bought a new position in Cummins during the first quarter valued at approximately $121,000. Captrust Financial Advisors bought a new position in Cummins during the second quarter valued at approximately $137,000. Finally, Acrospire Investment Management LLC bought a new position in Cummins during the second quarter valued at approximately $146,000. 80.34% of the stock is currently owned by institutional investors.

The company has a market cap of $25.99 billion, a price-to-earnings ratio of 17.59 and a beta of 1.09. The company’s 50-day moving average is $162.65 and its 200-day moving average is $155.23.

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About Cummins

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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