Shares in Cummins Inc. fell to the lowest level in three months Wednesday after the Columbus-based engine maker lowered its forecasts for revenue and profit and said it expects to cut as many as 1,500 jobs by the end of the year.
Its stock was trading at about $88 at noon, down almost 3 percent from Tuesday's $90.84 close. Earlier, they dropped to $86.50, the biggest intraday decline since July 10. The shares had gained 3.2 percent this year through Tuesday.
Cummins on Tuesday cut its forecast for full-year revenue to about $17 billion from $18 billion and reduced expectations for earnings before interest and taxes to about 13.5 percent from a range of 14.25 percent to 14.75 percent. That doesn’t include the cost or benefits of the job cuts.
“In my view this is worse than feared,” said Kristine Kubacki, a St. Louis-based analyst at Avondale Partners LLC. “My sense is the Street thought there would be a guide down, but this is sizable.”
Cummins, which has about 8,000 employees in Indiana, produces engines for trucks and power-generation equipment. The company had second-quarter earnings of $2.45 a share, excluding gains from divestitures. That exceeded the average of 18 estimates compiled by Bloomberg of $2.27.
“We continued to see weak economic data in a number of regions during the third quarter, increasing the level of uncertainty regarding the direction of the global economy,” Chief Executive Officer Tom Linebarger said in a statement. “As a result of the heightened uncertainty, end customers are delaying capital expenditures in a number of markets, lowering demand for our products.”
Class 8 truck orders fell 35 percent in North America last month to 15,205, according to FTR Associates.