February 5, 2015 / 1:57 PM / 3 years ago

UPDATE 1-Cummins cuts forecast due to weak overseas demand, strong dollar

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Feb 5 (Reuters) - Diesel engine maker Cummins Inc cut its full-year revenue forecast, citing weak demand in international markets and a strong dollar, sending its shares down about 3.6 percent in premarket trade on Thursday.

The company, which gets more than half its revenue from outside the United States, said it now expected full-year revenue of $19.61 billion to $20 billion, down from its previous forecast of $20 billion to $23 billion.

Analysts on average were expecting revenue of $20.96 billion in 2015, according to Thomson Reuters I/B/E/S.

The weak forecast overshadowed an 11 percent rise in quarterly revenue compared with a year earlier, driven by strong demand for the company’s truck engines in North America.

Cummins, which also makes natural gas engines used to generate electricity, said it faced weak demand in Brazil and Europe in the fourth quarter.

The company also said the strong dollar and weakness in international markets would continue to offset improving demand in North America.

The euro has fallen about 12 percent against the dollar in 2014 and dropped another 6 percent since the start of 2015.

The company’s net sales rose to $5.09 billion in the fourth quarter ended Dec.31, from $4.59 billion a year earlier.

Net income attributable to Cummins rose to $444 million, or $2.44 per share, from $432 million, or $2.32 per share.

Excluding items, the company earned $2.56 per share, beating the average analyst estimate of $2.51.

Cummins’ shares closed at $144.16 on the New York Stock Exchange on Wednesday. The stock had risen about 14 percent in the past 12 months, compared with a 0.54 percent fall in the Dow Jones U.S. Commercial Vehicles & Trucks Index. (Reporting by Radhika Rukmangadhan in Bengaluru; Editing by Maju Samuel and Simon Jennings)

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