Cummins 3Q profit sinks on steep sales decline

Cummins 3rd-quarter profit plunges on falling demand for truck engines and power systems

• On 12:31 pm EDT, Friday October 30, 2009

COLUMBUS, Ind. (AP) -- Cummins Inc. said Friday its third-quarter profit plunged 60 percent as demand for its diesel engines and vehicle power systems plunged.

There are far fewer trucks on the road than a year ago because of the steep decline in demand for all they carry, including a variety of everyday retail and manufactured goods.

The company earned $95 million, or 48 cents per share, down from $229 million, or $1.17 per share, a year earlier.

Revenue sank 31 percent to $2.53 billion from $3.69 billion.

Analysts polled by Thomson Reuters predicted a profit of 37 cents per share on $2.48 billion in sales.

Sales fell at least 25 percent in all four of the company's operating segments, with the largest declines in the Power Generation and Engine segments. Cummins expects the businesses to remain stifled for some time.

"While we saw improvement in some markets in the third quarter, we expect the economic climate to remain challenging until late 2010 -- especially in the United States and Europe," CEO Tim Solso said.

The stock fell $2.98, or 6.5 percent, to $42.94 in midday trading. The stock has ranged from $17.70 to $51.65 over the past year.