Cummins Inc

CMI: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$422.00	Pqqcyy	Sfcrscxnz

Cummins Earnings: Management Maintains 2023 Guidance, but the Market Sours on Shares

Dawit Woldemariam

Aug 3, 2023

The market sent Cummins’ shares down approximately 7% in intraday trading, following second-quarter earnings. We were encouraged by the fact that management maintained its 2023 guidance, but we think the market was focused on EBITDA margins moderating in the quarter. Consolidated EBITDA margins were down about 90 basis points to 15.1% in the second quarter. Though, there was some noise in both the second-quarter print and the year-ago period. The EBITDA margin contraction eases a bit when excluding costs related to the filtration business. The inclusion of Meritor also weighed on EBITDA margins, given its lower-margin nature compared with Cummins’ margins.

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