Cummins Lowers FY16 EBIT Outlook - Quick Facts

(RTTNews) - While reporting its third-quarter financial results today, engine maker Cummins Inc. (CMI) updated its financial outlook for fiscal 2016.

Full year EBIT is now expected to be 11.3 percent of sales, down from the prior forecast of 11.6 percent to 12.2 percent.

According to Cummins, the reduction in EBIT guidance is primarily a result of an increase in the expected costs of a loss contingency in the third quarter.

As disclosed in prior quarters, the loss contingency relates to the costs of a campaign to remedy quality issues with third party aftertreatment systems, which were sourced by one of the company's OEM customers and are paired with the company's engines in the OEM vehicle.

Based on the current forecast, Cummins now expects full year 2016 revenues to decline 9 percent, consistent with its prior guidance of down between 8 percent and 10 percent.