Cummins CMI today lowered its full year revenue and EBIT guidance
for 2012 and also announced actions to respond to the weakening global
economy.
The Company lowered its full year revenue outlook for 2012 to approximately
$17 billion compared to the Company's previous guidance of $18 billion.
Earnings Before Interest and Taxes (EBIT) are now expected to be approximately
13.5% for the year, compared to prior guidance of 14.25% to 14.75%. Based on
preliminary results and subject to normal quarterly financial statement
closing procedures, third quarter revenues are expected to be approximately
$4.1 billion and EBIT is expected to be approximately 12.0%. The Company does
not provide quarterly revenue or earnings guidance.
“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. As a result of the heightened uncertainty, end customers
are delaying capital expenditures in a number of markets, lowering demand for
our products,” said Tom Linebarger, Chairman and Chief Executive Officer. “We
have lowered our full year revenue forecast for several markets, with the most
significant changes in North America heavy duty truck and international power
generation markets. Demand in China has weakened in most end markets and we
have also lowered our forecast for global mining revenues. EBIT margins will
also be below our previous guidance primarily due to the sharp reduction in
revenues.”
The Company announced that it is taking actions necessary to respond
strategically to the current environment by cutting costs while maintaining
investments in key growth programs. Actions include a number of measures to
reduce cost including planned work week reductions, shutdowns at some
manufacturing facilities, and some targeted workforce reductions. The Company
expects to reduce its workforce by between 1000 and 1500 people by the end of
the year. The updated EBIT guidance does not include the benefits or costs of
these actions.
“Responding quickly and strategically during these challenging economic times
will pave the way for Cummins to emerge stronger as a company when markets
inevitably rebound,” continued Linebarger. “Taking these actions now will
allow us meet customer needs, maintain strong financial performance and allow
us to capitalize on future growth opportunities.”
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