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Cummins Q3 Profit Plunges 59%, Still Beats View (CMI)

By Dividend.com Staff
October 30th, 2009

cummins-q3-profit-plunges-59-still-beats-view-cmi

Engines maker Cummins Inc. (CMI) said Friday that its third quarter profit plunged 59% from last year, hurt by one-time charges and sharply lower revenue.

The Columbus-based company reported third quarter net income of $95 million, or 48 cents per share, compared with $229 million, or $1.17 per share, in the year-ago period. Excluding one-time charges, adjusted profit was 56 cents per share.

Sales plummeted 31% from last year, to $2.53 billion.

On average, Wall Street analysts expected a much lower profit of just 37 cents per share, on smaller revenue of $2.48 billion.

Cummins shares rose $1.46, or +3.2%, in morning trading Friday.

The Bottom Line
We had removed shares of CMI from our “recommended” list back last Sept.3, when shares traded at $61.72. The company has a dividend yield of 1.52%, based on last night’s closing stock price of $47.03. The stock has technical support in the $40 price area. If the shares can rebound off of this morning’s downgrade, we see overhead resistance around the $49-$53 price levels. We would remain on the sidelines for now.

Cummins Inc. (CMI) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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Disclaimer: Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. The author is not registered as an investment adviser. The author may or may not hold positions in the securities mentioned in this article or video. The author relies upon the "publisher's exclusion" from the definition of "investment adviser" as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws.