Cummins Inc. on Tuesday lowered its revenue forecast for 2012, saying it expected sales to be similar to 2011’s instead of increasing 10 percent like the Columbus-based engine manufacturer originally expected.
The company also announced its board of directors approved increasing the quarterly dividend for common stock to 50 cents from 40 cents.
The cheerier piece of news wasn’t enough to stop Cummins’ stocks from sliding 8.9 percent, to $86.91 per share, by the end of the trading day Tuesday.
The company expects to report $4.5 billion in revenue for its second quarter. Analysts originally expected more than $5 billion.
That would be on par with the $4.5 billion in revenue—resulting in a $455 million profit, or $2.38 per diluted share—that the company reported for its first quarter of 2012.
For all of 2011, Cummins reported a $1.9 billion profit—$9.55 per diluted share—resulting from $18 billion in revenue.
Cummins CEO Tom Linebarger, in a prepared statement, attributed the flat earnings to weaker markets and a slowing global economy.
“Order trends in the U.S. for trucks and power generation equipment have softened and demand in Brazil, China and India is not improving as we had previously expected,” Linebarger stated. “Our revenues have also been negatively impacted by the appreciation of the U.S. dollar against a number of currencies. We are making adjustments within our business to manage costs, while continuing to fund our critical growth programs and will continue to focus on execution and improving operating margins.”