Cummins earnings widely miss predictions

Cummins Inc. announced a larger-than-expected drop in quarterly earnings Tuesday morning, as revenue fell 12 percent on weak demand for its products in domestic and international markets.

The Columbus-based engine maker reported a first-quarter profit of $282 million, or $1.49 a share, down 38 percent from $455 million, or $2.38 a share, in the same quarter of 2012.

Analysts, on average, predicted Cummins would report a profit of $1.86 a share.

Revenue dropped to $3.9 billion, the company said.

“As anticipated, we experienced weak demand in the first quarter in many of our major markets,” Cummins CEO Tom Linebarger said in a written statement. “While uncertainty remains in a number of markets, we expect that the first quarter will mark the low point of the year for company revenues.”

Revenue declined by 15 percent in Cummins’ North America market and was down 10 percent internationally.

The biggest decline in demand came in the engine business, with unit volumes down 18 percent on a year-over-year basis, Cummins said. Shipments of high horsepower engines declined by 24 percent due to weakness in the mining, oil and gas, and power-generation markets.

The company forecasted full-year revenue to be either flat or down by as much as 5 percent.

“We expect moderately improving order trends in on-highway and construction markets in North America to be the most significant drivers of improvement in revenues going forward,” Linebarger said.

Cummins shares closed Monday at $113.25 each, but fell as much as 4.2 percent in premarket trading.