CMI Profit Margins
Gross, Operating & Net Margin Analysis for Cummins Inc
Margin Quality
Moderate
Current Profit Margins
Gross Margin
25.3%
$8.52B gross profit
Operating Margin
12.0%
$4.03B operating income
Net Profit Margin
8.8%
$2.96B net income
5-Year Margin Trends
What Margins Indicate About CMI
Business Quality
Lower gross margins may reflect commodity-like products or intense price competition in the Industrials.
Operational Efficiency
Expanding operating margins show Cummins Inc is improving operational leverage and cost management.
Profitability
Net margins in the 5-15% range are solid and typical for many profitable businesses.
Investment Implications
Mixed margin trends require deeper analysis to understand underlying business dynamics and sustainability.
Understanding Profit Margins
Gross Margin
(Revenue - Cost of Goods Sold) / Revenue. Measures pricing power and production efficiency before operating expenses.
Operating Margin
Operating Income / Revenue. Shows profitability from core operations after all operating expenses but before interest and taxes.
Net Profit Margin
Net Income / Revenue. The bottom line - shows how much profit the company keeps from each dollar of revenue after all expenses.
Analyze CMI Profitability
Get complete financial analysis with profitability trends, ROE, ROIC, and more
Frequently Asked Questions
What is CMI's profit margin?
CMI (Cummins Inc) has a net profit margin of 8.8%, meaning the company keeps $0.08782298782298784 in profit for every dollar of revenue. This represents a change from the previous year's net margin of 11.9%.
What is CMI's gross margin?
CMI's gross margin is 25.3%. Gross margin measures the percentage of revenue remaining after subtracting the cost of goods sold. A lower gross margin like this reflects the competitive dynamics of the Industrials.
What is CMI's operating margin?
CMI has an operating margin of 12.0%. Operating margin shows profitability after operating expenses but before interest and taxes. The 12.0% year-over-year improvement suggests better operational efficiency.
Are CMI's profit margins good?
CMI's margins are considered moderate. When evaluating margins, it's important to compare against Machinery peers, as different sectors have structurally different margin profiles.
How do profit margins affect CMI stock?
Profit margins are a key indicator of CMI's business quality and competitive position. The current margins should be evaluated alongside growth rates and return on capital to assess overall business quality. Expanding margins often lead to stock price appreciation, while contracting margins can signal competitive pressures.
What drives CMI's profit margins?
CMI's profit margins are influenced by several factors: pricing power vs competitors, operational efficiency, scale advantages, input costs (materials, labor), Machinery-specific dynamics, and management execution. The significant expansion in gross margin suggests changes in these underlying drivers.
Disclaimer: Margin analysis is based on reported financial statements and should be compared to industry peers for context. Different sectors have structurally different margin profiles. This information is for educational purposes only and should not be considered financial advice.