Bloomberg News

Cummins Falls After Lowering Its Sales Forecast for 2011

October 25, 2011

(Updates shares in second paragraphs.)

Oct. 25 (Bloomberg) -- Cummins Inc. fell after the maker of diesel engines lowered its annual sales forecast because of slower demand in China and India and a stronger U.S. dollar.

The shares fell 5.1 percent to $93.81 at the close in New York and have dropped 15 percent this year.

Sales this year will be $17.5 billion to $18 billion, down from a forecast of $18 billion, Columbus, Indiana-based Cummins said today in a statement. Cummins issued the $18 billion forecast on July 26 and repeated it Sept. 13. The average estimate of 13 analysts in a Bloomberg survey was $18.2 billion. Cummins gets 64 percent of its revenue outside the U.S.

“There is some uncertainty around the macro-economic environment,” Chief Operating Officer Tom Linebarger said in the statement. “Government actions to reduce inflation in India and China have resulted in softer near-term demand than we previously expected.”

Net income in the quarter ended Sept. 25 rose 60 percent to $452 million, or $2.35 a share, from $283 million, or $1.44, a year earlier, Cummins said today. Sales rose 36 percent to $4.63 billion as engine revenue increased 43 percent. Excluding items, profit was $2.20 a share. The average estimate of 15 analysts in a Bloomberg survey was $2.25.

--Editors: Bill Koenig, Jamie Butters

To contact the reporter on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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