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Cummins 3Q profit disappoints, cuts sales view

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October 29, 2013 09:56 AM EST | AP

COLUMBUS, Ind. (AP) — NEWS: Engine maker Cummins said Tuesday that its third-quarter net income barely rose, while revenue came in short of analyst expectations and will fall this year because of a drop-off in overseas demand.

DETAILS: The mining industry — a key market for Cummins — has been slowing down. Revenue from engines fell 1 percent to $2.5 billion because of lower demand for mining and light-duty highway engines, the company said. Sales of power generators dropped 13 percent to $712 million, while parts sales rose 14 percent to $1.1 billion.

North American revenue rose 11 percent, but international revenue fell 4 percent because growth in China and Brazil was offset by weak demand in India, Australia, and Europe.

NUMBERS: Net income rose less than 1 percent to $355 million, or $1.90 per share, from $352 million, or $1.86 per share, a year earlier. Without special items Cummins would have earned $1.94 per share — still well short of the $2.11 per share expected by analysts surveyed by FactSet.

Revenue rose 4 percent to $4.27 billion. Analysts expected $4.38 billion.

FUTURE: Columbus, Ind.-based Cummins had previously expected revenue in 2013 to be flat compared with last year, but now expects a decline of 3 percent. That implies sales of $16.81 billion this year, below Wall Street's forecast of $17.37 billion.

STOCK: Down $9.82, or 7.3 percent, to $125.09 in morning trading. Its 52-week range is $92.90 to $139.17.