Cummins Inc. (NYSE: 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.”
Details of third quarter results and the updated full year outlook will
be covered during the previously scheduled third quarter earnings
conference at 10 a.m. EDT on October 30, 2012. The Company will not be
making any further statements about either the third quarter or the full
year until the third quarter earnings conference.
About Cummins
Cummins Inc., a global power leader, is a
corporation of complementary business units that design, manufacture,
distribute and service diesel and natural gas engines and related
technologies, including fuel systems, controls, air handling,
filtration, emission solutions and electrical power generation systems.
Headquartered in Columbus, Indiana, (USA) Cummins employs approximately
44,000 people worldwide and serves customers in approximately 190
countries and territories through a network of more than 600
company-owned and independent distributor locations and approximately
6,500 dealer locations. Cummins earned $1.85 billion on sales of $18.0
billion in 2011. Press releases can be found on the Web at www.cummins.com.
Forward-looking disclosure statement
Information provided in
this release that is not purely historical are forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995, including statements regarding our forecasts,
guidance, preliminary results, expectations, hopes, beliefs and
intentions on strategies regarding the future. These forward looking
statements include, without limitation, statements relating to our plans
and expectations for our revenues for the second quarter of 2012, as
well as the full year. Our actual future results could differ materially
from those projected in such forward-looking statements because of a
number of factors, including, but not limited to: the adoption and
implementation of global emission standards; the price and availability
of energy; the pace of infrastructure development; increasing global
competition among our customers; general economic, business and
financing conditions; governmental action; changes in our customers’
business strategies; competitor pricing activity; expense volatility;
labor relations; and other risks detailed from time to time in our
Securities and Exchange Commission filings, including particularly in
the Risk Factors section of our 2011 Annual Report on Form 10-K.
Shareholders, potential investors and other readers are urged to
consider these factors carefully in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements made herein
are made only as of the date of this press release and we undertake no
obligation to publicly update any forward-looking statements, whether as
a result of new information, future events or otherwise. More detailed
information about factors that may affect our performance may be found
in our filings with the Securities and Exchange Commission, which are
available at http://www.sec.gov
or at http://www.cummins.com
in the Investor Relations section of our website.
Presentation of Non-GAAP Financial Information
EBIT is a
non-GAAP measure used in this release. Cummins presents this information
as it believes it is useful to understanding the Company's operating
performance, and because EBIT is a measure used internally to assess the
performance of the operating units. EBIT is defined and reconciled to
what management considers to be the most comparable GAAP measure in a
schedule attached to our quarterly earnings release, which for the third
quarter will be available on October 30th 2012.
