February 3, 2009 / 1:26 PM / 9 years ago

UPDATE 2-CUMMINS 4th-qtr net tumbles, sees tough year ahead

    * Profit drops 55 percent 
    * Says sales will fall 20 percent in 2009 
    * Says will have cut 6 pct of its workforce by March 31 
    
 (Adds CEO quote, charge, details on results and outlook) 
    CHICAGO, Feb 3 (Reuters) - Cummins Inc  said on 
Tuesday fourth-quarter earnings fell 55 percent as recession 
triggered a sharp reversal in once-strong demand for its diesel 
engines and electrical power systems. 
    The company also forecast 2009 would be a tough year across 
all its business segments, with sales down 20 percent from 
2008. But it said it expects "solid" profits despite the 
slump. 
    "We are in an extraordinarily challenging period," Tim 
Solso, chairman and chief executive, said in a statement. 
    Cummins reported a fourth-quarter profit of $89 million, or 
45 cents a share, down from $198 million, or $1 a share, a year 
earlier. 
    Sales fell 6 percent to $3.29 billion. 
    Analysts on average expected a profit of 41 cents a share, 
according to Reuters Estimates. 
    The latest results included a $37 million pretax charge to 
cover the cost of laying off 650 professional workers during 
the quarter. 
    Job cuts will continue, Cummins said. The company has said 
it will lay off an additional 800 workers between now and the 
end of the current quarter. 
    In all, Cummins said it will have eliminated 1,400 salaried 
workers and 1,300 hourly workers, or about 6 percent of its 
workforce, between the start of the fourth quarter and the end 
of the current quarter. 
    In addition, it said it has laid off 2,500 contract 
workers, cut the pay of corporate officers by 10 percent, 
temporarily idled or shortened work weeks at several plants, 
and significantly reduced planned capital expenditures for the 
year. 
 (Reporting by James Kelleher; editing by John Wallace) 
 ((james.kelleher@thomsonreuters.com ; +1 312 408 8130; Reuters 
Messaging: james.kelleher.reuters.com@reuters.net)) 
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Keywords: CUMMINS/  
    
 
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