Why Engine Manufacturer Cummins Shares Are Down Today
Portfolio Pulse from Lekha Gupta
Cummins Inc (NYSE:CMI) shares dropped after the company agreed to a $1.675 billion settlement over U.S. regulatory claims of emissions certification violations for certain pick-up truck engines. Cummins allegedly installed defeat devices on 630,000 engines from model years 2013 to 2019 and undisclosed auxiliary emission control devices on 330,000 engines from model years 2019 to 2023. The company will record a charge of approximately $2.04 billion in Q4 FY23 and plans to pay about $1.93 billion in H1 FY24. Cummins' stock price fell 2.56% to $237.76.
December 22, 2023 | 2:37 pm
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NEGATIVE IMPACT
Cummins Inc's stock price declined following the announcement of a $1.675 billion settlement for emissions certification violations, with a projected charge of $2.04 billion in Q4 FY23.
The settlement amount is substantial and will have a significant financial impact on Cummins, leading to a large charge in the upcoming financial quarter. This negative news is likely to affect investor sentiment and could result in a short-term decline in stock price.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100