Cummins this week reported lower sales and profit in the second quarter of 2009 compared to its record performance during the same period in 2008, as the global recession continued to dampen demand around the world.
Sales for the quarter were $2.43 billion, 37 percent lower than the $3.89 billion in the second quarter of 2008. Net income attributable to Cummins was $56 million, or 28 cents a share, down from $293 million, or $1.49 a share, a year ago.
The second-quarter results include a $7 million charge associated with the cost of job-reduction actions taken at several manufacturing facilities during the quarter.
The decline in profitability was primarily because of sharply lower volumes. The engine and components segments continue to see the most severe reductions in demand, while the pace of the sales decline in the power generation segment increased rapidly in the quarter. Profitability in all three segments was significantly affected by the lower volumes.
The engine segment posted sales of $1.31 billion for the quarter, down 45 percent from the same period of 2008. Sales declined sharply in nearly every geographic market because of the global recession.
"The economic climate continues to be extremely challenging, and we are managing our business under the assumption that we won't see any recovery in our markets in 2009," Cummins chairman and CEO Tim Solso said in a statement.
"Still, our aggressive efforts to reduce costs and align manufacturing capacity with demand have allowed us to perform well under the circumstances and to position ourselves to emerge from the downturn an even stronger company," he added.
Based on the second quarter results and company forecasts for the remainder of the year, Cummins reaffirmed its sales and profit guidance for 2009. The company still expects 2009 sales to be down more than 30 percent from 2008.