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Cummins warns of losses
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December 19, 2000: 10:52 a.m. ET
Engine maker blames Dodge plant shutdown for quarter shortfalls
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NEW YORK (CNNfn) - Engine maker Cummins Inc. warned Tuesday that it would see a loss in the fiscal fourth quarter rather than the profit forecast by analysts.
The company cited a 50 percent drop in sales of diesel engines to heavy truck manufacturers, as well as temporary closures of Dodge pick-up plants that use the company's engines. Those plant shutdowns were announced Dec. 1 by DaimlerChrysler (DCX: Research, Estimates) and extended on Dec. 15.
Cummins also announced it would take a pretax charge in the fourth quarter of approximately $160 million to deal with a restructuring. This is the second straight quarter Cummins warned about results.
 On the news, shares of Cummins (CUM: Research, Estimates) dropped $2.38, or 6.6 percent, to $33.44 in early Tuesday trading.
The company said it now expects to lose between 35 and 45 cents a share in the quarter, excluding the restructuring charge. Analysts surveyed by earnings tracker First Call were looking for a 66 cents a share profit in the period. The company earned $1.82 a share in the previous quarter.
The company said it expects its fiscal first-quarter loss to be similar to the fourth-quarter loss of 35 cents to 45 cents a share, and said full-year 2001 earnings will likely be similar to 2000 earnings, which should come in about $2.92 to $3.02 a share based on the new fourth-quarter guidance.
There was no quarterly estimate for the first quarter of 2001 from First Call, but the research firm had estimated that 2001 earnings would be $3.63 a share.
"We continue to pursue our strategy of changing how Cummins participates in the North American heavy-duty truck engine business," said Cummins Chairman and Chief Executive Tim Solso.
"These changes will include additional cost reduction actions to further drive out expenses, and may include an additional restructuring charge," said Solso. 
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Cummins Inc.
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