Cummins Inc., the Columbus, Ind.-based truck engine maker, cut its revenue outlook Tuesday (July 10), providing a somber blueprint for a whole raft of second-quarter reports from the industrial heartland.
MarketWatch reported that Cummins said the 10% sales growth it had expected in 2012 simply isn’t happening. So they dialed back expectations, predicting that second-quarter sales would come in at $4.45 billion, or roughly the same as in 2011.
It was a cruel blow to Cummins’s share price, which tumbled 9% on the news. Clearly, a lot of investors didn’t see this one coming.
The problem, according to Cummins, is not just an obviously sluggish U.S. economy, but dashed hopes in Brazil, China and India, three huge markets where the CEO and Chairman Tom Linebarger said demand “is not improving as we had previously expected.”
These three nations have been bolstering U.S. manufacturers’ sales for years, providing growth opportunities not seen in this country for decades. But globalization makes them just as susceptible to a world-wide slowdown as anyone else.