Weaker Revenue Pushes Down Cummins Profit

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COLUMBUS -

Columbus-based Cummins Inc. (NYSE: CMI) is reporting second quarter net income of $406 million, compared to $471 million in the same quarter last year. The manufacturer says a dip in sales was driven by lower North American production, coupled with weak global demand for off-highway and power generation equipment.

Global revenues were $4.5 billion, off 10 percent compared to Q2 of 2015. As a result, Cummins has lowered its previous full-year revenue guidance. It expects the same major factors affecting this quarter to pull 2016 revenues down 8 to 10 percent, compared to the 5 to 9 percent forecast previously.

Chief Executive Officer Tom Linebarger says despite the declines, "we made strong progress in our cost reduction initiatives in the second quarter, while continuing to invest in and launch new products that will drive profitable growth in the future. Benefits from restructuring actions, material cost reduction initiatives, and improvements in product quality helped to mitigate the impact of weak demand in a number of our largest markets and will position the Company for stronger performance when markets improve." Year-to-date, he says over $1 billion has been returned to shareholders and the board recently approved a 5.1 percent quarterly dividend increase as the company continues plans to return 75 percent of operating cash flow to shareholders this year.

You can connect to more about Cummins' second quarter results by clicking here.

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