FILE - In this Wednesday, Dec. 19, 2012, file photo, a man walks past a Wells Fargo location in Philadelphia. Wells Fargo, the biggest U.S. mortgage lender, says it earned a record $4.9 billion in the fourth quarter, up 25 percent from the same period a year before. Revenue rose 7 percent, to $21.9 billion, beating the $21.3 billion expected by analysts polled by FactSet. (AP Photo/Matt Rourke, File)
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FILE - In this Wednesday, Dec. 19, 2012, file photo, a man walks past a Wells Fargo location in Philadelphia. Wells Fargo, the biggest U.S. mortgage lender, says it earned a record $4.9 billion in the fourth quarter, up 25 percent from the same period a year before. Revenue rose 7 percent, to $21.9 billion, beating the $21.3 billion expected by analysts polled by FactSet. (AP Photo/Matt Rourke, File)
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FILE - In this March 15, 2012 photo, a trader works in the Goldman Sachs booth on the floor of the New York Stock Exchange. Goldman Sachs announced Wednesday, Jan. 16, 2013 that its earnings almost tripled in the fourth quarter as investment banking revenues surged. (AP Photo/Richard Drew)
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This undated image provide by Wendy's shows the fast food company's new logo. Wendy's reported fourth-quarter earnings Wednesday, Jan. 16, 2013, that topped Wall Street estimates but a 2 percent rise in revenue came up short of expectations. It reaffirmed its earnings guidance for fiscal 2013. (AP Photo/Wendy's)
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FILE - In this May 11, 2012 file photo, people stand in the lobby of JPMorgan Chase headquarters in New York. JPMorgan Chase reported a 55 percent jump in earnings for the last three months of 2012 as mortgage fees and other income surged. (AP Photo/Mark Lennihan, File)
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In this Wednesday, Dec. 12 2012 photo, Taneshia Wright, of Manhattan, fills out a job application during a job fair in New York. Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November's 148,000. The unemployment rate is projected to remain at 7.7 percent. (AP Photo/Mary Altaffer)
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FILE - In this Tuesday, Dec. 11, 2012 file photo, an advertisement in the classified section of the Boston Herald newspaper calls attention to possible employment opportunities in Walpole, Mass. Economists forecast that employers added 155,000 jobs in December, according to a survey by FactSet. That would be slightly higher than November's 148,000. The unemployment rate is projected to remain at 7.7 percent. (AP Photo/Steven Senne, File)
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In this Wednesday, Dec. 12 2012 photo, Taneshia Wright, of Manhattan, fills out a job application during a job fair in New York. U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during the tense negotiations to resolve the fiscal cliff. The solid job growth wasn’t enough to push down the unemployment rate, which remained 7.8 percent last month, the Labor Department said Friday, Jan. 4, 2013. The rate for November was revised up from an initially reported 7.7 percent. (AP Photo/Mary Altaffer)
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FILE - In this Tuesday, Dec. 11, 2012 file photo, an advertisement in the classified section of the Boston Herald newspaper calls attention to possible employment opportunities in Walpole, Mass. U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during the tense negotiations to resolve the fiscal cliff. The solid job growth wasn’t enough to push down the unemployment rate, which remained 7.8 percent last month, the Labor Department said Friday, Jan. 4, 2013. The rate for November was revised up from an initially reported 7.7 percent. (AP Photo/Steven Senne, File)
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FILE - In this April 14, 2011 file photo provided by Zipcar.com, Zipcar Chairman and CEO Scott Griffith stands with a Zipcar Mini-Cooper before the opening bell at the NASDAQ Market Site in New York. Avis is buying Zipcar for $491.2 million, expanding its offerings from traditional car rentals to car sharing services. The boards of both companies unanimously approved the buyout. (AP Photo/Zipcar.com, Craig Ruttle, File)
Cummins 4Q adj. results top analysts' expectations
COLUMBUS, Ind. (
AP) —
Cummins net income slid 31 percent in the fourth quarter as the recession in Europe and slowing growth elsewhere cut into demand for its engines, but it did better than most had expected and shares rose in morning trading Wednesday.
After a strong start to the year, demand began to soften and the company cut expenses to offset weak revenue, which slide 13 percent in the final three months of the year. But the company remained cautious with the global economic picture still cloudy.
"We were able to deliver improved gross margins in the fourth quarter and record gross margins for the full year despite the weakness in demand," said Chairman and CEO Tom Linebarger. "The work we have undertaken to reduce costs and lower inventory should benefit the company when the global economy improves, however there is uncertainty surrounding the timing and pace of improvement in end markets in 2013."
For the three months ended Dec. 31, Cummins earned $381 million, or $2.02 per share. That's down from $548 million, or $2.86 per share, a year earlier.
Taking out restructuring charges and a one-time tax benefit, earnings were $2 per share.
Analysts surveyed by FactSet expected earnings of $1.74 per share.
Shares of Cummins added $1.95 to $199.34 in morning trading.
Selling, general and administrative expenses increased to $1.9 billion from $1.84 billion in the quarter, while research, development and engineering expenses rose to $728 million from $629 million.
Revenue fell to $4.29 billion from $4.92 billion. Wall Street forecast revenue of $4.05 billion.
Cummins Inc. said that it experienced weaker demand in truck, construction, and oil and gas markets in North America. The Columbus, Ind., company also reported softer demand overseas for power generation equipment and construction, truck and mining engines.
Full-year net income dropped 10 percent to $1.66 billion, or $8.74 per share, from $1.85 billion, or $9.55 per share, in the prior year.
Adjusted earnings were $8.61 per share.
Annual revenue fell 4 percent to $17.33 billion from $18.05 billion mostly on weaker international sales, particularly in Brazil, China and Europe.
Going forward, Cummins anticipates 2013 revenue will be flat to down 5 percent. Based on 2012's revenue of $17.33 billion, this implies $16.46 billion to $17.33 billion.
Analysts expect revenue of $17.66 billion.
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