Cummins Inc. was able to top analyst expectations with its second-quarter performance despite a slowdown in sales and profit.
The Columbus-based engine maker on Tuesday said second-quarter sales dropped 10 percent when compared to the same period of 2015, mostly because of a decline in North American truck production and weak global demand for off-highway and power-generation equipment.
Revenue was $4.53 billion, or $2.40 per share, in the latest quarter, compared with $5 billion, or $2.62 per share, in the year-ago period.
The revenue results slightly beat Wall Street expectations. The average estimate of six analysts surveyed by Zacks Investment Research was $4.51 billion.
Cummins turned a profit of $406 million, or $2.40 per share, during the quarter, down from $471 million, or $2.62 per share, a year ago.
The average estimate of 10 analysts surveyed by Zacks was for earnings of $2.15 per share.
Cummins said North American sales declined 13 percent in the latest quarter. International sales dropped by 4 percent, with the Middle East, Mexico and Brazil showing the biggest declines among the company’s global markets.
Currency fluctuations—primarily a stronger U.S. dollar—also had a negative impact, reducing revenue by about 1 percent.
The company lowered its guidance on revenue expectations. Full-year sales in 2016 are expected to drop about 8 percent to 10 percent from 2015—lower than Cummins’ previous guidance of a range from 5 percent to 9 percent.
Cummins cited lower North American truck production and weaker demand in global off-highway markets as reasons for the lower expectations.
“We made strong progress in our cost-reduction initiatives in the second quarter, while continuing to invest in and launch new products that will drive profitable growth in the future,” Cummins CEO Tom Linebarger said in the company’s earnings release.
Cummins shares were down about 1 percent Tuesday morning, to $120.51 each. They are up about 38 percent since the beginning of the year, but down about 6 percent over the last 12 months.