Tags: Cummins | jobs | cut | Forecasts

Cummins Might Cut as Many as 1,500 Jobs, Lowers Forecasts

Wednesday, 10 Oct 2012 10:18 AM

Cummins Inc., a maker of engines, said it expects to cut as many as 1,500 jobs by the end of 2012 and lowered its forecasts for revenue and profit.

Cummins on Tuesday cut its forecast for full-year revenue to about $17 billion from $18 billion and its forecast for earnings before interest and taxes to about 13.5 percent from a range of 14.25 percent to 14.75 percent. The Ebit forecast doesn’t include the cost or benefits of the job cuts.

“In my view this is worse than feared,” said Kristine Kubacki, a St. Louis-based analyst at Avondale Partners LLC. “My sense is the street thought there would be a guide down, but this is sizable.”

Cummins, based in Columbus, Indiana, produces engines for trucks and power-generation equipment. Its shares had gained 3.2 percent this year to $90.84 as of yesterday’s close. The shares slid 4.8 percent to $86.50 at 9:21 a.m. New York time before the start of regular trading.

The company had second-quarter earnings of $2.45 a share, excluding gains from divestitures. That exceeded the average of 18 estimates compiled by Bloomberg of $2.27.

“We continued to see weak economic data in a number of regions during the third quarter, increasing the level of uncertainty regarding the direction of the global economy,” Chief Executive Officer Tom Linebarger said in a statement. “As a result of the heightened uncertainty, end customers are delaying capital expenditures in a number of markets, lowering demand for our products.”

Class 8 truck orders fell 35 percent in North America last month to 15,205, according to FTR Associates.


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Cummins Inc., a maker of engines, said it expects to cut as many as 1,500 jobs by the end of 2012 and lowered its forecasts for revenue and profit.
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Wednesday, 10 Oct 2012 10:18 AM
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