Cummins Inc. (CMI) plans to lay off 150 workers based in its southern Indiana factories, according to sources owing to the decline in sales in North America, China and Brazil. The layoff is a part of the company’s plan to reduce headcount by 1,500 workers worldwide.
The job cut will mainly affect the workers based in the Fuel Systems Plant in Columbus, Columbus Mid Range Engine Plant and the Seymour Engine plant. Together, these three plants provide employment to about 1,500 workers.
In the second quarter of 2012, Cummins registered 2% growth in adjusted earnings per share to $2.45 from $2.41 in the year-ago quarter despite a fall in the adjusted net income to $465 million from $468 million in the corresponding quarter last year.
The results surpassed the Zacks Consensus Estimate by 18 cents. The year-over-year rise in earnings per share was attributable to a fall in average shares outstanding to 190.1 million in the quarter from 194.4 million shares in the year-ago quarter.
Total revenue went down 4% year over year to $4.45 billion in the quarter, slightly lower than the Zacks Consensus Estimate of $4.47 billion. The decline was due to weak international markets in Brazil and China.
Cummins Inc. is a leading worldwide designer, manufacturer and distributor of diesel and natural gas engines, electric power generation systems, and engine-related components, fuel systems, controls and air handling systems. The company is set to release its third quarter 2012 results before the market opens on October 30.
The company faces stiff competition from Caterpillar Inc. (CAT) and Navistar International Corporation (NAV). Currently, it retains a Zacks #5 Rank, which translates into a short-term (1 to 3 months) Strong Sell rating.
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