Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Cummins (NYSE:CMI) and the best and worst performers in the heavy transportation equipment industry.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a strong Q2. As a group, revenues were in line with analysts’ consensus estimates.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
Heavy Transportation Equipment stocks have held steady amidst all this with average share prices relatively unchanged since the latest earnings results.
Cummins (NYSE:CMI)
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.Cummins reported revenues of $8.80 billion, up 1.8% year on year. This print exceeded analysts’ expectations by 5.3%. Overall, it was a very strong quarter for the company with a decent beat of analysts’ operating margin and earnings estimates.
“We achieved record quarterly sales and solid profitability in the second quarter, led by significant improvement in our Power Systems business,” said Jennifer Rumsey, Chair and CEO of Cummins.
Interestingly, the stock is up 16% since reporting and currently trades at $338.51.
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Best Q2: Douglas Dynamics (NYSE:PLOW)
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.Douglas Dynamics reported revenues of $199.9 million, down 3.6% year on year, outperforming analysts’ expectations by 9.4%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $26.31.
Weakest Q2: Commercial Vehicle Group (NASDAQ:CVGI)
Formed from a partnership between two distinct companies, CVG (NASDAQ:CVGI) offers various components used in vehicles and systems used in warehouses.Commercial Vehicle Group reported revenues of $229.9 million, down 12.3% year on year, falling short of analysts’ expectations by 3.3%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 28.3% since the results and currently trades at $3.39.
Blue Bird (NASDAQ:BLBD)
With around a century of experience, Blue Bird (NASDAQ:BLBD) is a manufacturer of school buses and complementary parts.Blue Bird reported revenues of $333.4 million, up 13.3% year on year. This print topped analysts’ expectations by 2%. Overall, it was a very strong quarter as it also logged an impressive beat of analysts’ earnings estimates.
The stock is down 7.5% since reporting and currently trades at $44.90.
Oshkosh (NYSE:OSK)
Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.Oshkosh reported revenues of $2.85 billion, up 18% year on year. This result topped analysts’ expectations by 2.5%. It was a very strong quarter as it also logged an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.
Oshkosh achieved the fastest revenue growth among its peers. The stock is down 8.2% since reporting and currently trades at $104.94.
This content was originally published on Stock Story
