Cummins Inc Q3 profit beats on strong data center demand

Overview

• U.S. power solutions maker's Q3 revenue rose 13% yr/yr but missed analyst expectations

• Q3 adjusted EPS beat analyst expectations

• Results driven by strong Power Systems demand, especially for data center power generation

Outlook

• Cummins sees full-year revenue growth of about 10%

• Company expects full-year EBITDA margin of about 18.2%

• Company expects Q4 revenue to exceed Q3 and reach a new record

Result Drivers

• DATA CENTER DEMAND - Co said strong global demand for power generation equipment, especially from data center buildout, drove results

• TRUCK MARKET MIX - Co said U.S. medium- and heavy-duty truck demand was strong, but pickup truck orders weakened

• GEOGRAPHIC GROWTH - Co said North America and China contributed to revenue growth

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 16 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy"

• Wall Street's median 12-month price target for Cummins Inc is $700.00, about 48.4% above its November 4 closing price of $471.84

• The stock recently traded at 14 times the next 12-month earnings vs. a P/E of 20 three months ago

Reuters Recommended Reads

• Nov 3 - Eaton Q3 sales, EPS beat estimates on strong demand

• Nov 3 - Everus Construction Q3 revenue beats on data center demand

• Nov 3 - Chipmaker AMD forecasts Q4 revenue above estimates on strong data center demand; shares rise

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)