COLUMBUS, Ind. — Cummins Inc., a maker of heavy-truck engines, reports it lost 45 US cents per share in the fourth quarter of 2000, or a loss of US$17 million, on sales of US$1.61 billion, exclusive of a pre-tax charge of US$160 million for costs associated with certain restructuring actions.
In a press release, Cummins said including the charge, it posted a loss of US$120 million or a loss of US$3.16 per share.
In the fourth quarter of 1999, the company reported net earnings of US$25 million, or 65 US cents per share, on sales of US$1.84 billion, including a pre-tax charge of US$60 million for costs associated with the dissolution of its Wartsila joint venture.
For the full year 2000, Cummins reported net earnings of US$111 million or US$2.91 per share, on revenues of US$6.6 billion, excluding the charge. For the full year 1999, excluding a charge, Cummins reported net earnings of US$205 million or US$5.29 per share, on revenues of US$6.6 billion.
The company said its results were hurt by “the significant drop in demand in a number of North American end markets.”
It said that, “in the heavy-duty truck market, shipments of engines for the quarter were down more than 52 per cent from last year’s levels.”
The company said it is continuing a restructuring plan begun in December. That included the engine business and the “termination of over 350 salaried employees, layoffs and reduced work hours for hourly employees, the cancellation or delay of a number of new product programs and information technology projects. We continue to align staffing levels to address the drop in demand for engines in North America; since May of 2000, we have reduced the number of full-time-equivalent people in our Engine business by over 1000. We are also working on a number of longer-term restructuring activities throughout the company, including closing, consolidating, or exiting nine businesses and facilities. We expect that these actions, when fully implemented, will save the company approximately US$55 million per year.”
The company said it is “working hard to fundamentally change how Cummins participates in the North American heavy-duty truck engine business.” It said its future strategy “will likely include additional cost reduction actions, and may include an additional restructuring charge.”
It said it expects first quarter 2001 revenues would be approximately 10 per cent lower than the fourth quarter, citing the continued deterioration of North American truck markets.”