Investopedia: Cummins Keeps It Coming

Trucks, drilling rigs, bulldozers and longwall miners all share at least one thing in common - they're worthless without a good engine powering them. As companies as diverse as Caterpillar (NYSE:CAT), Joy Global (Nasdaq:JOYG), Komatsu (Nasdaq:KMTUY) and CNH (NYSE:CNH) continue to report strong demand and backlogs, engine specialist Cummins (NYSE:CMI) is leveraging this into exceptional profits.

New Quarter, Old Story  
There is only so much a writer can do to make the Cummins story sound fresh after so many similar quarters. For the second quarter, Cummins reported that sales climbed 45% and exceeded the upper end of the Wall Street analyst range. Company revenue was pushed along by 53% growth in engines (which is close to two-thirds of sales), but 42% growth in components, 28% growth in power generation and 36% growth in distribution were nothing to cry about either. 


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Investopedia: CarMax Stays In The Fast Lane

With the valuation that used-car superstore operator CarMax (NYSE:KMX) sports, high-octane growth is a must. Fortunately, the company is delivering, though the immediate reaction to Thursday's earnings report suggests that once again investors built their expectations to a level that would be almost impossible to please.

A Full Throttle Fourth Quarter 

Just as the company did in the November quarter, CarMax delivered revenue growth of 23% for this fourth quarter. The details were a little different, though, as comp store growth trailed off just a bit. "Trailed off" is a very relative notion, though; comp store growth of 12% is nothing to apologize for, nor is the 14% growth in overall used unit sales.
Profitability was solid as well. Gross margin slipped a bit (only about 30 basis points) from last year, and improved slightly on a sequential basis. On a per-unit basis, gross profit increased by about 6%. The company delivered solid operating leverage, and operating income rose about 16%. Operating margin clearly lost a bit of steam, but not to a significant degree and some of that can be chalked up to accounting changes in the auto finance side of the business. (For more, see CarMax Suffers For Investors' Over-revved Expectations.)

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Investopedia: Lincoln Electric: A Quality Niche Industrial

With a 42% rise in the stock over the past year and 140% since early 2009 lows, clearly there have been rewards for the nimble and patient with welding equipment maker Lincoln Electric (Nasdaq:LECO). Lucky for Lincoln Electric, though, welding is strongly tied to industrial activity, and the company seems to be looking at a prolonged multi-year recovery in business.   

A Solid End to a Rebound Year
Lincoln Electric surpassed analyst expectations for the fourth quarter, posting 22% revenue growth and surpassing the high-end analyst estimate by 7%. Those results are good enough in their own right; even better when considering the 9% sequential growth and the historical trend for the fourth quarter to be soft. Looking at the company's markets, North American sales jumped 25%, while South America was the laggard at 8% growth. Overall, the company saw volume increase 20% - a strong testament to the increased business activity and product demand.

Profitability was more of a mixed bag for the company. Gross margins shrank by nearly three full points as the company reversed a large LIFO credit to a small charge, but the company did recover a lot of this through an even bigger reduction in SG&A spending. All in all, adjusted operating income rose 26%, while adjusted net income increased 38%. 


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Foreigners Agree: Eagle Ford Shale Is The Place To Be

The Eagle Ford Shale area in Texas is a hot area for energy development that just keeps getting hotter. As two more deals from Monday highlight, companies from around the world are willing to pay up to get a piece of this potentially significant oil and gas resource in south Texas. 

CNOOC and Chesapeake
China National Offshore Oil Corporation (NYSE:CEO), or CNOOC as it is more commonly known, is shelling out potentially as much as $2.2 billion for a one-third stake in Chesapeake Energy's (NYSE:CHK) Eagle Ford acreage. Chesapeake's holdings total about 600,000 acres and appear to be relatively oil-rich - not an insignificant detail considering the considerable price differences between natural gas and oil these days.

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