Cummins misses profit expectations on high manufacturing costs

Cummins

03/08/2023 13:18

Aug 3 (Reuters) - Engine maker Cummins  CMI.N  reported
a second-quarter profit on Thursday that missed analysts'
estimates, hurt by high manufacturing costs.
    The company's shares fell 3.8% to $252.20 in premarket
trading.
    Increasing production costs have battered the auto
industry's earnings over the months. Despite taking pricing
actions, automakers and parts suppliers have struggled to cover
costs related to raw materials and labor.
    Cummins has also been grappling with weak demand in China as
new emission regulations and inventory build up slow down
recovery in the market.
    The company reported a second-quarter profit of $5.05 per
share, missing analysts' estimates of $5.29, according to
Refinitiv.
    "While we see demand remaining strong through 2023 and we
are maintaining our guidance on revenue and profitability, we
continue to closely monitor global economic indicators," CEO
Jennifer Rumsey said.
    Cummins's new power segment, Accelera, which designs,
manufactures, sells and supports hydrogen production solutions
as well as electrified power systems, also incurred an operating
loss of $114 million on increased development costs.
    However, the company's revenue for the second quarter rose
31.2% to $8.64 billion, compared with estimates of $8.37
billion.

 (Reporting by Raechel Thankam Job and Shivansh Tiwary; Editing
by Shounak Dasgupta)
 ((RaechelThankam.Job@thomsonreuters.com))