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A dour management team on the Cummins (CMI +2.6%) earnings call today wasn't enough to shake the...

A dour management team on the Cummins (CMI +2.6%) earnings call today wasn't enough to shake the bulls. Full year North American revenue growth of 9% sounds good, but the CEO was quick to point out +40% Y/Y in Q1 was followed by -8% Y/Y in Q3 and Q4. In China, inventory levels are so high, even a big spring selling season may not be enough to clear them. Mining? "The weakest of any major end market we serve ... revenues could decline by as much as 25% for the full year."
Comments (5)
  • chopchop0
    , contributor
    Comments (3228) | Send Message
     
    They probably know how conservative management is at CMI
    6 Feb 2013, 10:26 PM Reply Like
  • wyostocks
    , contributor
    Comments (7703) | Send Message
     
    Yeah right.
    6 Feb 2013, 10:34 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2499) | Send Message
     
    I think I read in Barrons a few years back that Cummings had noticed that a slowdown in their sales often was a leading indicator of global recessions. Not the case here, due to the weakness in mining from what was likely the peak of that market, but still a worrying signal. I'll try to find a link.
    6 Feb 2013, 10:55 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2499) | Send Message
     
    It was Caterpillar, not Cummings, and it was in Fortune, not Barrons. I was close, in that both begin with C, and both are companies?? Sorry guys, but heres the link:

     

    http://bit.ly/jr2RXR

     

    The quote I was referring to was: "Top management, realizing the company's susceptibility to GDP shifts, had once asked Cat economists to find a leading indicator. "We've got good news and bad news," the economists reported, as CFO Rapp tells it. "The good news is, we found an indicator that predicts shifts in U.S. GDP with a lead time of six to nine months. The bad news is, it's our own sales to users." "
    7 Feb 2013, 12:00 AM Reply Like
  • redarrow5150
    , contributor
    Comments (998) | Send Message
     
    This is one of the reasons why I got out of CAT. Something is a miss in China and at least CMI is being honest. To me this is what I would have expected CAT to say but instead are doing investigations into accounting frauds. I understand CAT but believe they are not telling (or not understanding) what's happening in China.
    6 Feb 2013, 11:55 PM Reply Like
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