(RTTNews) - Engine and power generation equipment maker Cummins Inc. (CMI: News ), on Friday reported a 59% drop in profit for the third quarter, as sales dropped 31% from last year amid continued economic weakness in many of its markets. Based on the third quarter results and forecast for the remainder of the year, the company raised its forecast for fiscal year 2009. Looking ahead, Cummins said though there are indications of improvement in some markets, it expects the economic climate to remain challenging until late 2010.

Chairman and Chief Executive Tim Solso said, "Given the continued weakness in many of our markets, the company performed extremely well in the third quarter. The decisive actions we have taken over the past several months have allowed us to remain profitable, generate cash and invest in the company's future in the face of the worst recession in decades."

For the third quarter, Columbus, Indiana-based Cummin's net income attributable to the company plunged to $95 million or $0.48 per share from $229 million or $1.17 per share in the same period last year.

The third quarter results included $22 million of restructuring and other charges associated with job cuts.

Excluding one-time items, net income attributable to Cummins Inc. for the quarter was $110 million or $0.56 per share.

On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.37 per share for the quarter. Analysts' estimates typically exclude one-time charges and gains.

In the preceding second quarter, Cummins reported net income attributable to the company of $56 million, or $0.28 a share, down 81% from $293 million, or $1.49 per share, a year ago.
Sales for the third quarter plunged to $2.53 billion from $3.70 billion in the year earlier period, beating analysts' consensus revenue estimate of $2.48 billion for the quarter.

For the preceding second quarter, net sales were $2.43 billion, down 37% from $3.89 billion a year ago.

Segment wise, engine segment sales for the quarter dropped 37% to $1.44 billion from the year-ago quarter, with sales down sharply in nearly every geographic market due to the global recession. Sales for the Power Generation segment totaled $549 million, down 38% from the prior-year quarter. Commercial product sales decreased 43% and was most affected by economic slowdown in the United Kingdom, Middle East, North and Latin America.

The Components segment generated sales of $591 million, down 26% from last year. The company noted that sales and profit decline were driven primarily by large volume drop from OEM customers in North America and Europe. Distribution segment sales slipped 27% year-over-year to $422 million, affected by decreased global demand and unfavorable foreign currency movements, which affected segment sales by 5 percentage points.

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