Diesel engines maker Cummins Inc. (CMI) late Tuesday lowered its full-year earnings outlook and announced a massive round of layoffs.
The Columbus, IN-based company said it now expects full-year revenue of $17 billion, down from a prior outlook of $18 billion. CMI also lowered its 2012 EBITDA forecast to around 13.5%, compared with a prior range of 14.25% to 14.75%.
As a result of a slowdown in demand for its products, Cummins plans to lay off up to 1,500 jobs by the end of this year.
CEO Tom Linebarger commented, “We continued to see weak economic data in a number of regions during the third quarter, increasing the level of uncertainty regarding the direction of the global economy. As a result of the heightened uncertainty, end customers are delaying capital expenditures in a number of markets, lowering demand for our products.”
Cummins shares fell $4.34, or -4.8%, in premarket trading Wednesday.
The Bottom Line
Shares of Cummins Inc. (CMI) have a 2.20% dividend yield, based on last night’s closing stock price of $90.84. The stock has technical support in the $83-$85 price area. If the shares can firm up, we see overhead resistance around the $95-$97 price levels.
Cummins Inc. (CMI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.3 out of 5 stars.