REFILE-UPDATE 2-Cummins profit falls on weak sales; shares down
* Weak demand in North America drives revenue drop
* Company sticks to full-year forecast
* Shares down 5.5 percent
April 30 (Reuters) - Cummins Inc reported a sharper-than-expected drop in first-quarter earnings on Tuesday, citing weak demand for its turbines and engines in most of its markets, especially the mining and oil and gas industries.
The news sent the company's shares down more than 5 percent in morning trading.
"Expectations were low ... since management had talked down the quarter, but we still expect the stock to underperform Tuesday given the magnitude of the miss," said William Blair & Co analyst Larry De Maria.
Cummins, which makes diesel engines, gas turbines, turbochargers and a variety of filtration products, said it believed the first quarter would "mark the low point" for its sales, and it stuck to its full-year earnings forecast.
First-quarter net profit fell to $282 million, or $1.49 a share, from $455 million, or $2.38 a share, a year earlier.
Analysts on average had expected $1.86 a share, according to Thomson Reuters I/B/E/S.
Sales dropped 12 percent to $3.9 billion.
Sales in the United States and Canada, which accounted for half of Cummins' revenue during the quarter, fell 15 percent, primarily as a result of lower demand from makers of commercial trucks as well as continued weakness from oil and gas markets, the company said.
Cummins shares were down 5.5 percent at $107.07 on the New York Stock Exchange.
- Japan PM makes offering to Yasukuni Shrine; China seizes ship
- South Korea president says conduct of ferry crew tantamount to murder |
- Deadly gun attack in eastern Ukraine shakes fragile Geneva accord |
- Australia sees 'regroup' on Malaysian plane search in a few days |
- At Mt. Gox bitcoin hub, 'geek' CEO sought both control and escape