) revealed that its Board of Directors has authorized a new share
repurchase program and the acquisition of up to $1 billion of the
company's stock. The new repurchase program has been announced at
a time when the existing $1 billion share repurchase program is
about to end.
CATERPILLAR INC (CAT): Free Stock Analysis
CUMMINS INC (CMI): Free Stock Analysis Report
NAVISTAR INTL (NAV): Free Stock Analysis
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Under the existing $1 billion share repurchase program, approved
in February 2011, Cummins has repurchased a total of $749 million
worth of shares. Of the total amount, $518 million worth of
shares have been repurchased in 2011 and the rest $231 million in
the first nine months of 2012,
Cummins reported a 19.1% fall in adjusted earnings per share to
$1.78 in the third quarter of 2012 from $2.20 in the year-ago
quarter. Net income declined 20.6% to $336.0 million from $423.0
million in the third quarter of 2011. With this, profits in the
quarter missed the Zacks Consensus Estimate by 6 cents per share.
The decrease in earnings was due to uncertainty in most of the
markets served by the company. The company has actively responded
to this situation by canceling or delaying some projects,
reducing production at some of its manufacturing plants and
cutting discretionary expenses. It also plans to reduce workforce
by 1000 to 1500 people by the end of this year.
The company's revenues for the quarter dipped 11% to $4.1
billion, lower than the Zacks Consensus Estimate of $4.2 billion.
The decline in revenues was driven by a 21% fall in revenues in
the international market, which offset the 2% rise in revenues in
For 2012, Cummins expects revenues of $17.0 billion, which is
lower than the previous guidance of $18.0 billion. It also
expects EBIT margin of 13.5%, down from the previous estimate of
14.25%-14.75% for the year.
Cummins Inc. is a leading worldwide designer, manufacturer and
distributor of diesel and natural gas engines, electric power
generation systems, and engine-related components, fuel systems,
controls and air handling systems.
The company faces stiff competition from
Navistar International Corporation
). Currently, the stock retains a Zacks #3 Rank, which translates
into a short-term (1 to 3 months) rating of Hold.