Indiana-based engine manufacturer Cummins Inc. lowered its full-year financial guidance Monday after it missed revenue and profit expectations with its third quarter results.
Cummins reported quarterly revenue of $5.8 billion, down 3 percent from the same period of 2018. Profit came in at $622 million, or $3.97 per share, down from $692 million, or $428 per share, in the year-ago quarter.
Revenue missed the consensus estimate of Zacks Investment Research analysts by 1.21%. Zacks analysts had expected earnings of $3.84 per share.
Cummins said sales in North America were flat while international revenue decreased 8 percent. Currency negatively impacted revenue by 1 percent, primarily due to a stronger U.S. dollar, the company said.
“Despite weakening conditions in a number of our largest markets, Cummins delivered strong profits, record operating cash flow, and returned a record $910 million of cash to shareholders in the third quarter (through dividends and share repurchases),” Cummins CEO Tom Linebarger said in written remarks. “While we expected to see a moderation of demand in the second half of the year, sales have weakened even faster than we anticipated. Cummins is taking actions to align our cost structure with the lower revenues while maintaining investment in products that will deliver sustainable growth and profitability.”
The Columbus-based company said it now expects full-year earnings before interest, taxes, depreciation and amortization to be in the range of 15.9% to 16.3% of sales, down from previous guidance of 16.25% to 16.75%.
It said full-year 2019 revenue is expected to decline 2 percent, down from the previous guidance of flat revenue.
Cummins said the reduction in its revenue forecast was driven by lower truck production in North America, India, Brazil, and Europe, as well as lower demand in off-highway markets, including North America construction and global mining markets.
Shares in Cummins were down 0.3 percent Tuesday morning, to $179.50 each.