Cummins warns on sales, shares slide

Wed Jul 11, 2012 12:42am IST

Related Topics

Stocks

   

(Reuters) - U.S. engine maker Cummins Inc cut its full-year sales forecast on Tuesday, citing weaker U.S. orders from truck and power generation customers, a stronger dollar and softer demand in emerging markets, but it also raised its dividend.

Shares of Cummins slid 10 percent in afternoon trading after the company said it expects second-quarter sales of about $4.45 billion, and warned that it sees full-year sales "in line" with 2011 rather than growing by 10 percent as it had earlier forecast.

Analysts, on average, had expected second-quarter sales of $5.1 billion and 2012 sales of just under $20 billion.

"Order trends in the U.S. for trucks and power generation equipment have softened and demand in Brazil, China and India is not improving as we had previously expected," Chief Executive Tom Linebarger said in a statement.

Separately, Cummins said it would raise its quarterly dividend by 25 percent to 50 cents a share.

Linebarger cited "strong cash flow and low levels of debt" for investment in future growth and increased dividend.

Cummins shares were down 10 percent at $85.83, its lowest level since last December.

Cummins, due to report results on July 31, is the second major industrial company this week to warn about quarterly results. On Monday, Dover Corp cut its 2012 profit forecast, citing weakness in Europe. (Reporting by Nick Zieminski and Lynn Adler in New York; Editing by Gerald E. McCormick and Carol Bishopric)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Ebola Outbreak

HEALTH SHOWCASE

Breast Cancer Fight

Breast Cancer Fight

Roche, Merck extend immunotherapy fight to breast cancer  Full Article 

Office Perks

Office Perks

Apple, Facebook will pay for female employees to freeze their eggs.  Full Article 

It's In The Genes

It's In The Genes

Genetic link to Danish happiness, says study.  Video 

Smoking Effects

Smoking Effects

Americans have 14 million smoking-related ailments: study.  Full Article 

Health Food

Health Food

Olive oil, nuts may help reverse heart risk factors.  Full Article 

Digital Doctors

Digital Doctors

China sees tech cure for healthcare woes.  Full Article 

Stem Cell Study

Stem Cell Study

Stem cells from human embryos prove safe, improve vision - study.  Full Article 

Shortages Impact

Shortages Impact

Shortages hinder Venezuela's battle against fever outbreaks  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage