Financial Results and Public Companies and Cummins Inc. and Manufacturers and Manufacturing & Technology

Cummins shares fall after quarterly report

October 26, 2010

Columbus-based engine manufacturer Cummins Inc. on Tuesday reported a surge in profit and sales in the third quarter, but the performance came in short of analyst expectations.

Shares fell $6.06 each, or 6.4 percent, to $88.50 in morning trading.

The company earned $283 million, or $1.44 per share, for the quarter that ended Sept. 26. That was up from $95 million, or 48 cents per share, during last year's third quarter. Revenue rose 34.4 percent to $3.4 billion, from $2.53 billion a year earlier.

The third-quarter profit was boosted by an after-tax benefit of $21 million, or 11 cents per share, for a favorable legal ruling in Brazil. On that basis, its profit was 8 cents per share short of the $1.41 per share expected by analysts surveyed by Thomson Reuters. Analysts expected revenue of $3.6 billion.

The company said its increased profit and revenue were due to strong overseas sales, which rose 56 percent from a year earlier. Non-U.S. revenue accounted for 63 percent of its revenue, the company said.

Sales in its engine segment rose 44 percent, to $2.1 billion. Power generation sales were up 44 percent, to $791 million.

Cummins said the North American truck engine market continued to be weak because of federal emissions changes and a slow economic recovery in the U.S. It predicted 2010 revenue of $13 billion. Analysts were expecting almost $13.2 billion.

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