* Profit falls 30.5 percent in fourth quarter
* Adjusted earnings of $2 per share top estimates of $1.75
* Sees 2013 sales flat to down 5 percent
Feb 6 Cummins Inc posted a 30.5 percent
drop in profit that was less steep than Wall Street had feared
and warned that sales could fall as much as 5 percent this year
as it copes with falling demand for its heavy truck engines.
The U.S. manufacturer did not provide a 2013 per-share
profit target, but said on Wednesday it expects its earnings
before interest and taxes to amount to 13 percent to 14 percent
of sales, compared with 13.7 percent in the year just ended.
Sales could be flat to down 5 percent, it said.
Its shares rose 3.5 percent in early trading, with analysts
reckoning that after having to lower its guidance twice in 2012,
Cummins had reason to be guarded.
"We believe this forecast is likely a prudent starting point
that Cummins can execute on should conditions remain difficult
and post potential upside should particular end markets rebound
earlier than anticipated," said David Leiker, an analyst with
R.W. Baird & Co.
The Columbus, Indiana-based company reported a
fourth-quarter profit of $381 million, or $2.02 per share,
compared with $548 million, or $2.86 per share a year earlier.
Factoring out restructuring charges and a tax benefit,
profit was $2.00 per share, above the $1.75 per share that
analysts on average had expected, according to Thomson Reuters
Revenue fell 12.8 percent to $4.29 billion, which was also
"Demand declined across most geographies and end markets in
the second half of 2012 as the global economy slowed," Chief
Executive Tom Linebarger said.
Cummins' shares gained $4.10 to $121.49 on the New York
As of Tuesday's close, Cummins' shares were down 2 percent
over the past 52 weeks - a time that saw the broad Standard &
Poor's 500 index rise 12 percent.
Cummins has not been alone in coping with weak demand for
trucks. Late last year truck maker Navistar International Corp
, in the midst of a major restructuring, reported a