Cummins Shares Fall On Trucking Industry Woes

NEW YORK (AP) — Shares of diesel-engine manufacturer Cummins Inc. fell Wednesday, as investors fretted about the deterioration of the trucking industry.

In afternoon trading, Cummins shares fell 98 cents, or nearly 3 percent, to $32.58 after dropping to $31.94 earlier in the day. Over the past 52 weeks, the company's shares have traded between $17.70 and $75.98.

Henry Kirn of UBS Investment Research cut his rating for Cummins to "Neutral" from "Buy," citing valuation concerns.

"We believe near-term expectations may be too high given continued weakness in our survey results, a still soft North American freight environment and deteriorating economic conditions in key regions," Kirn wrote in a note to investors.

According to a survey done by UBS, trucking-business conditions and freight rates continue to deteriorate. As a result, many trucking companies plan to hold on to the trucks they already have longer than they normally would have.

In addition, only 15 percent of truckers expect to prebuy extra trucks in 2009 and to delay buying vehicles compliant with 2010 emissions standards, while 70 percent of those surveyed said they don't expect to prebuy trucks.

At the same time, 54 percent of truckers expect to buy their first 2010 compliant trucks in 2011 or later, UBS said.