Cummins Inc. (NYSE:CMI) has long been a go-to provider of engines and related components for a variety of industrial purposes, especially heavy-duty trucks, buses, and other heavy equipment. The company has gotten a lot of attention lately for its natural-gas-powered engine technology, which aims to help its customers take advantage of low nat-gas prices. Let’s take an early look at what’s been happening with Cummins Inc. (NYSE:CMI) over the past quarter and what we’re likely to see in its quarterly report.
Stats on Cummins
| Analyst EPS Estimate | $1.86 |
| Change From Year-Ago EPS | (22%) |
| Revenue Estimate | $3.97 billion |
| Change From Year-Ago Revenue | (11.3%) |
| Earnings Beats in Past 4 Quarters | 4 |
Source: Yahoo! Finance.
How will Cummins keep growing this quarter?
Analysts have gotten less optimistic about Cummins Inc. (NYSE:CMI)’ earnings prospects in recent months, cutting a dime off their earnings-per-share call for the just-ended quarter and reducing full-year 2013 estimates by $0.25 per share. That has helped contribute to a 3% drop for the stock since late January despite a broad rise in the overall stock market.
The Motley Fool named Cummins Inc. (NYSE:CMI) the best company in America based on its focus on engine solutions that balance the needs of its customers against the good of society. Cummins has made a viable business model out of developing high-performance engines that nevertheless provide fuel efficiency and reliability while producing less pollution. Just last month, Cummins announced a deal with Eaton Corporation, PLC Ordinary Shares (NYSE:ETN) to produce a heavy-truck powertrain package to improve fuel economy by 3% to 6%.
But the big push for Cummins has been in natural-gas powered engines, where it has historically worked with Westport Innovations Inc. (USA) (NASDAQ:WPRT) and has also gone out on its own. That’s been a huge growth area, as the Cummins Westport Innovations Inc. (USA) (NASDAQ:WPRT) joint venture got a huge order in February for 900 nat-gas-fueled busses for the mass-transit entities serving Los Angeles and San Diego. Despite modest rises in natural gas prices, they still remain well below equivalent oil prices, and demand for nat-gas alternatives hasn’t slackened.
In Cummins Inc. (NYSE:CMI)’ quarterly report, watch for the company to discuss how recent moves from corporate customers are pushing it to expand more quickly. As Wal-Mart Stores, Inc. (NYSE:WMT) and other users seek to increase their use of nat-gas-powered trucks, Cummins Westport Innovations Inc. (USA) (NASDAQ:WPRT) has a huge potential for further growth even if a cyclical downturn affects more traditional heavy-machinery and component makers.
The article Can Cummins Still Grow in a Sluggish Economy? originally appeared on Fool.com and is written by Dan Caplinger.
Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: @DanCaplinger. The Motley Fool recommends and owns shares of Cummins and Westport Innovations.
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