Cummins Inc. stock research
FY2024 Q1
Cummins (CMI) Gross Margin — Quarter Ended Mar 31, 2024
Revenue decreased compared to both the prior quarter and the same quarter last year, while gross profit remained flat versus both periods. Gross margin improved versus the preceding quarter but weakened relative to the year-ago quarter, driven by a lower cost of revenue as a share of sales.
Gross margin takeaway
Quarter ended Mar 31, 2024 · FY2024 Q1
Revenue decreased compared to both the prior quarter and the same quarter last year, while gross profit remained flat versus both periods. Gross margin improved versus the preceding quarter but weakened relative to the year-ago quarter, driven by a lower cost of revenue as a share of sales.
- The improvement in gross margin from the prior quarter was supported by a reduction in cost of revenue relative to revenue, even as revenue contracted. Compared to a year ago, the gross margin weakened because revenue fell slightly while cost of revenue decreased by a smaller proportion.
- Gross margin of 24.3% in the current quarter is higher than the prior quarter's 23.4% but lower than the year-ago quarter's 24.0%. The margin trend is mixed, showing sequential improvement but a year-over-year weakening.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
24.3%
Gross profit
$2.0B
Revenue
$8.4B
Cost of revenue
$6.4B
Quarter-over-quarter change
+0.9 pts
Year-over-year change
+0.3 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2023 | $8.6B | $2.1B | $6.5B | 24.9% |
| Sep 30, 2023 | $8.4B | $2.1B | $6.4B | 24.6% |
| Dec 31, 2023 | $8.5B | $2.0B | $6.5B | 23.4% |
| Mar 31, 2024 | $8.4B | $2.0B | $6.4B | 24.3% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2023
+0.9 pts
Year-over-year change
Mar 31, 2023
+0.3 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The improvement in gross margin from the prior quarter was supported by a reduction in cost of revenue relative to revenue, even as revenue contracted. Compared to a year ago, the gross margin weakened because revenue fell slightly while cost of revenue decreased by a smaller proportion.
Gross margin of 24.3% in the current quarter is higher than the prior quarter's 23.4% but lower than the year-ago quarter's 24.0%. The margin trend is mixed, showing sequential improvement but a year-over-year weakening.
Monitor the trajectory of revenue relative to cost of revenue to see if the sequential margin improvement can be sustained.