Cummins’ 4Q, Full-Year Profit Declines

Diesel engine maker Cummins Inc. said Tuesday its fourth-quarter profit fell 55% from a year ago, due to declining demand.

Fourth-quarter net earnings fell to $89 million, or 45 cents a share, from $198 million, or $1 per share, a year ago. Sales fell 6% to $3.29 billion.

Engine-segment sales fell 10% from a year ago, to $1.94 billion, while earnings before interest and taxes plunged 79% to $25 million.

Fourth-quarter engine shipments declined for heavy-duty trucks by 9%, medium-duty trucks by 9%, light-duty auto by 34%, recreational vehicles by 72% and construction by 30%, Cummins said.

For the full year, net income rose 8% to $801 million, or $4.08 per share, from $739 million or $3.70, a year ago. Sales rose 10% to $14.34 billion

Cummins said it has set in place a series of cost-cutting measures, some previously announced, including cutting 2,500 contract and temporary workers, freezing most hiring, reducing the number of corporate officers by 10% by March 31, temporarily closing or shortening work weeks at a number of manufacturing facilities, cutting discretionary and reducing IT spending and significantly reducing planned capital expenditures in 2009.

The company last month predicted its sales would decline for the year due to “significant declines in demand.