Cummins Q3 Results Miss View, To Cut Up To 2000 Jobs; Lowers 2015 Outlook

(RTTNews) - Engine maker Cummins Inc. (CMI) on Tuesday reported a decline in profit for the third quarter on lower sales that were impacted by a strong U.S. dollar and on weaker demand in global off highway and power generation markets. Results for the quarter missed analysts' expectations. The company also lowered its revenue outlook for fiscal 2015.

Cummins said it expects to reduce its professional workforce by up to 2,000 people, with the majority completed by the end of this year. The company expects these actions to deliver annualized savings in the range of $160 million to $200 million.

The company will record pre-tax costs of between $70 million and $90 million associated with the workforce reduction in the fourth quarter of 2015.

Third-quarter net income attributable to the company declined to $380 million or $2.14 per share from $423 million or $2.32 per share in the year-ago period.

On average, 25 analysts polled by Thomson Reuters expected earnings of $2.60 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales declined 6 percent to $4.62 billion from $4.89 billion last year. Analysts expected revenues of $4.91 billion.

Currency negatively impacted revenues by 4 percent, primarily due to a stronger U.S. dollar. was partially offset by distributor acquisitions in North America.

Based on the current forecast, Cummins now expects fiscal 2015 revenues to be flat to down 2 percent, compared to the prior guidance of growth between 2 and 4 percent.

The company now forecast full-year EBIT in a range of 12.75 to 13.0 percent of sales, down from the prior range of 13.5 to 14.0 percent of sales.