Cummins has lowered full year revenue estimates, despite reporting its highest third quarter sales and profits ever, today.
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In a statement, the truck engine maker said that strong gains internationally had more than offset continued weakness in the company’s North American consumer markets. However, it was still revising revenues to grow in 2008 by 12% from last year, down from earlier guidance of 15%. The company expects to earn an EBIT margin of 10% on its sales.
“Despite its strong overall performance, the company is experiencing significant declines in some of its consumer markets as the US economy continues to deteriorate,” the company warned.
“Economic conditions in the US and Europe are not going to improve in the fourth quarter. Cummins is closely monitoring the economic situation around the world and is taking steps to appropriately adjust spending and investment levels to ensure that the company meets its financial commitments in the future.”
Chief financial officer Pat Ward said: “We have experience in managing through difficult economic times, and we will be proactive in monitoring our costs very closely in the short term, even as we continue to invest in profitable growth opportunities.
“With our strong balance sheet, positive cash flow and available credit facilities we are well positioned to manage through the downturn in the economy, while delivering the products our customers expect and the financial returns our investors demand.”
Third quarter sales of US$3.69bn were 10% higher than $3.37bn during the same period in 2007. Net income rose 24% to $229m, or $1.17 a share. Earnings before interest and taxes (EBIT) increased 24% to $380m, from $306m in the third quarter of 2007.
