Diesel engine maker Cummins Inc. (CMI), Wednesday reported a decline in profit for the third quarter, as revenue decreased reflecting prevailing weakness in the global economy.
The company, however, confirmed its revenue outlook for the full year 2012.
Chief Executive Tom Linebarger said, "Demand has dropped sharply over the last three months, reflecting a high degree of uncertainty among customers in most geographic markets."
Linebarger said the company has responded to the economic weakness by delaying or canceling projects, lowering production at few plants, and planning to lay off about 1000 to 1500 employees by the year-end.
"We are continuing to fund projects that are important for future growth and meeting commitments to customers. We are working to respond to the conditions now to ensure the long term strength of the company and to best serve the many stakeholders who rely on Cummins long term success," Linebarger added.
Cummins revenues in the third quarter dropped 11 percent to $4.12 billion from $4.63 billion last year. Analysts polled by Thomson Reuters estimated revenues of $4.15 billion for the quarter.
North American revenues rose 2 percent, while revenues from international markets slipped 21 percent.
Sales for the engine segment decreased 14 percent from a year ago to $2.5 billion, while distribution sales increased 2 percent to $801 million from last year. Components sales dropped 8 percent to $938 million, and power generation segment slipped to $814 million.
The Columbus, Indiana-based company's third-quarter profit declined to $352 million or $1.86 per share from $452 million or $2.35 per share a year ago. Excluding special items, earnings for the quarter were $1.78 per share, down from $2.20 per share last year.
On average, 19 analysts polled by Thomson Reuters expected earnings of $1.86 per share for the quarter. Analysts' estimates typically exclude one-time items.
For the full year 2012, the company continues to expect revenues of $17 billion. Fourteen analysts currently estimate revenues of $17.11 billion for the year. The company has lowered its full year outlook twice this year, in July and in September.
CMI is currently trading at $93.21, down $0.61 or 0.65%, on a volume of 1.1 million shares on the NYSE.
For comments and feedback: editorial@rttnews.com