Cummins y-y earnings plunge

COLUMBUS, Ind. — Cummins reported lower sales and profit in the first quarter and blamed the global recession for affecting demand for the company’s products around the world.

Sales for the quarter were $2.44 billion, down 30 percent from $3.47 billion during the same period in 2008. Earnings Before Interest and Taxes of $28 million, or 1.1 percent of sales, fell 91 percent from $315 million, or 9.1 percent of sales, in the first quarter 2008. Net income attributable to Cummins Inc. was $7 million, or $0.04 a share, a 96 percent decrease from $190 million ($0.97 a share) a year ago.

The first quarter results include a $66 million charge to cover the costs associated with job reduction actions taken in the quarter. Cummins announced plans to reduce its workforce by more than 4,100 employees and contract workers during the quarter in response to lower demand for its products

The company now expects 2009 sales to be slightly more than 30 percent lower than 2008.

"The first quarter was, as we expected, extremely challenging and we do not see the economy or our markets improving for the remainder of 2009," said Cummins Chairman and Chief Executive Officer Tim Solso. "We have taken significant actions to lower our costs and improve our productivity in response to the global recession, which has affected virtually every market in which we operate around the world."

In addition to reducing its workforce worldwide, Cummins has made significant reductions in discretionary spending and has further prioritized capital expenditures to focus on the most critical projects, especially those associated with the launch of new emission compliant products in 2010.

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