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Cummins (Cummins) Gross Margin %

: 23.42% (As of Dec. 2023)
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Gross Margin % is calculated as gross profit divided by its revenue. Cummins's Gross Profit for the three months ended in Dec. 2023 was $2,001 Mil. Cummins's Revenue for the three months ended in Dec. 2023 was $8,543 Mil. Therefore, Cummins's Gross Margin % for the quarter that ended in Dec. 2023 was 23.42%.


The historical rank and industry rank for Cummins's Gross Margin % or its related term are showing as below:

CMI' s Gross Margin % Range Over the Past 10 Years
Min: 23.71   Med: 24.84   Max: 25.89
Current: 24.22


During the past 13 years, the highest Gross Margin % of Cummins was 25.89%. The lowest was 23.71%. And the median was 24.84%.

CMI's Gross Margin % is ranked worse than
56.63% of 2935 companies
in the Industrial Products industry
Industry Median: 26.44 vs CMI: 24.22

Cummins had a gross margin of 23.42% for the quarter that ended in Dec. 2023 => Competition eroding margins

The 5-Year average Growth Rate of Gross Margin for Cummins was -0.60% per year.


Cummins Gross Margin % Historical Data

The historical data trend for Cummins's Gross Margin % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Cummins Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Gross Margin %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 25.37 24.70 23.71 23.93 24.22

Cummins Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Gross Margin % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 23.41 24.00 24.87 24.56 23.42

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Cummins's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Cummins Gross Margin % Distribution

For the Industrial Products industry and Industrials sector, Cummins's Gross Margin % distribution charts can be found below:

* The bar in red indicates where Cummins's Gross Margin % falls into.



Cummins Gross Margin % Calculation

Gross Margin is the percentage of Gross Profit out of sales or Revenue.

Cummins's Gross Margin for the fiscal year that ended in Dec. 2023 is calculated as

Gross Margin % (A: Dec. 2023 )=Gross Profit (A: Dec. 2023 ) / Revenue (A: Dec. 2023 )
=8249 / 34065
=(Revenue - Cost of Goods Sold) / Revenue
=(34065 - 25816) / 34065
=24.22 %

Cummins's Gross Margin for the quarter that ended in Dec. 2023 is calculated as


Gross Margin % (Q: Dec. 2023 )=Gross Profit (Q: Dec. 2023 ) / Revenue (Q: Dec. 2023 )
=2001 / 8543
=(Revenue - Cost of Goods Sold) / Revenue
=(8543 - 6542) / 8543
=23.42 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Cummins  (NYSE:CMI) Gross Margin % Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Cummins had a gross margin of 23.42% for the quarter that ended in Dec. 2023 => Competition eroding margins


Be Aware

If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.


Cummins Gross Margin % Related Terms

Thank you for viewing the detailed overview of Cummins's Gross Margin % provided by GuruFocus.com. Please click on the following links to see related term pages.


Cummins (Cummins) Business Description

Traded in Other Exchanges
Address
500 Jackson Street, Box 3005, Columbus, IN, USA, 47202-3005
Cummins is the top manufacturer of diesel engines used in commercial trucks, off-highway equipment, and railroad locomotives, in addition to standby and prime power generators. The company also sells powertrain components, which include transmissions, turbochargers, aftertreatment systems, and fuel systems. Cummins is in the unique position of competing with its primary customers, heavy-duty truck manufacturers, who make and aggressively market their own engines. Despite robust competition across all its segments and increasing government regulation of carbon emissions, Cummins has maintained its leadership position in the industry.
Executives
Jennifer Rumsey officer: Chief Technical Officer 500 JACKSON STREET, COLUMBUS IN 47201
Daniel William Fisher director 2526 SPRUCE MEADOWS DRIVE, BROOMFIELD CO 80023
Jonathan David Wood officer: Vice President & CTO 500 JACKSON STREET, COLUMBUS IN 47201
Sharon R Barner officer: VP - General Counsel 500 JACKSON STREET, COLUMBUS IN 47201
Georgia R Nelson director C/O TOWER AUTOMOTIVE INC, 27175 HAGGERTY ROAD, NOVI MI 48377-3626
Di Leo Allen Bruno V director INTERNATIONAL BUSINESS MACHINES CORP., C/O SEC'Y'S OFFICE, ONE NEW ORCHARD ROAD, ARMONK NY 10504
Franklin R Changdiaz director 500 JACKSON ST., M/C 60701, COLUMBUS IN 47201
Tony Satterthwaite officer: President - Distribution 1400 73RD AVENUE NE, MINNEAPOLIS MN 55432
Norman Thomas Linebarger officer: President-Power Gen.
Tracy A Embree officer: VP & Pres. - Components Group 500 JACKSON STREET, COLUMBUS IN 47201
Mahesh Narang officer: VP & President - Components 500 JACKSON STREET, COLUMBUS IN 47201
Mark Andrew Smith officer: VP - Operations Finance 500 JACKSON STREET, COLUMBUS IN 47201
Marvin Boakye officer: VP - Chief Human Resources Off PO BOX 99900, LOUISVILLE KY 40269
Srikanth Padmanabhan officer: President - Engine Busines 500 JACKSON STREET, COLUMBUS IN 47201
Jennifer Mary Bush officer: VP & Pres. - Power Systems CENTURY ALUMINUM COMPANY, 1 S. WACKER DRIVE, SUITE 1000, CHICAGO IL 60606