Cummins Inc. profit slides 96 percent in 1Q 2009

The IBJ

Cummins Inc. revised its 2009 revenue and earnings outlook downward today while reporting its first-quarter profit slid 96 percent compared to the same period a year ago.

The Columbus diesel engine maker posted a profit of $7 million, or 4 cents per share, down from $190 million, or 97 cents per share, a year earlier.

Revenue fell 30 percent, to $2.4 billion, and sales declined in all four of the company's business segments, with the diesel engine and components divisions taking the biggest hits.

The company offered a bleak near-term outlook, saying it expects 2009 sales to fall to about $10 billion, more than 30-percent lower than the $14.3 billion it posted in 2008. It anticipates 2009 earnings before interest and taxes of about $500 million, excluding restructuring charges. Last year, it earned $801 million.

"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," Chairman and CEO Tim Solso said in a statement.

First-quarter results included a $66 million charge to cover costs associated with massive layoffs. Cummins announced plans earlier this year to eliminate 4,100 jobs, or 10 percent of its work force, worldwide in response to slumping demand for its products.

Excluding the restructuring charge, profit would have been $51 million, or 26 cents per share, above analysts' estimates of 23 cents a share.

Shares of Cummins opened this morning at $31.40, down 6.2 percent from yesterday's close.