Cummins ( NYSE: CMI ) fell 6.7% in premarket trading after the maker of vehicle engines cut its guidance for full-year EBITDA to 15% of sales from 15.5%.
The estimate doesn’t include automotive parts supplier Meritor, whose acquisition by Cummins was completed in August. It also doesn’t include the effects of suspending its operations in Russia and costs related to spinoff of Cummins’s filtration business, which makes the Fleetguard brand of products for trucks.
EBITDA fell 19% from the prior quarter to $884 million in Q3, but expanded from a year earlier by 2.6%. The quarterly decline was attributed to weaker joint venture earnings in China, a one-time employee bonus and costs association with its acquisition and divestment activity.
Excluding the Meritor business and related acquisition and integration costs, EBITDA was $907 million, or 13.8% of sales, compared with $862 million, or 14.4% of sales, a year earlier.
“During the third quarter of 2022, Cummins advanced its growth strategy most notably with the completion of the acquisition of Meritor, and we have been excited to welcome our new colleagues into our company,” Jennifer Rumsey, president and CEO of Cummins. “Demand from customers remains strong, reflecting the quality and performance of our products and robust conditions in most markets except China.”
Cummins kept its guidance for 2022 revenue growth of 8%.
The company’s revenue grew 22% from a year earlier to $7.3 billion in Q3, beating estimates by $170 million.
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Cummins falls in early trading after trimming EBITDA guidance