Cummins concludes record-setting year on a down note
COLUMBUS, Ind. — Cummins remained profitable through 2008, despite a downturn in the fourth quarter.
The engine maker reported its fifth consecutive year of record sales and profits yesterday. Sales for the year rose 10% to US$14.3 billion and net income was up 8% to US$801 million.
However, economic woes caught up with the company in the fourth quarter, which saw sales drop 6% compared to the same quarter of 07 and net income drop from US$198 million to just US$89 million. The biggest declines were in the engine and components segments, the company reported.
Sales in Cummins engine segment were down 10% in the fourth quarter, compared to the same period the year before. The company reported engine shipments declined in nearly all on-highway markets, including heavy-duty truck (9%) and medium-duty truck (9%).
“Given our record-setting performance during the first nine months of the year, the rapid drop in demand in the fourth quarter as a result of the global recession was a major disappointment,” said Cummins chairman and CEO Tim Solso. “At the same time, we moved quickly to lower our costs and tightly manage our capital spending, and already have taken further action in early 2009.”
Cummins said it is expecting 2009 sales to be 20% lower than 2008, and has taken cost-cutting measures.
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