Trucks

Cummins posts lower profits after CEO's tariff warning

Cummins CEO
Cummins CEO Tom Linebarger. Photo: Chip Somodevilla/Getty Images

U.S. engine maker Cummins on Wednesday reported lower-than-expected quarterly profit and forecast full-year sales below analysts' estimates, Reuters reports.

The state of play: The news plays out almost exactly as CEO Tom Linebarger warned in a July New York Times op-ed. "These tariffs put us in a worse position now than when we started these negotiations, and we are concerned there is no end in sight," he wrote. "Because of this uncertainty, companies like ours are standing still, unclear on how and where to invest."

Trucking's troubles could preview an economic downturn

Data: Cass Information Systems; Chart: Lazaro Gamio/Axios

Truck shipments' year-over-year growth fell in December for the first time since 2016, data from the Cass Freight Index showed.

Why it matters: Truck shipments are thought to be a leading indicator as they're very sensitive to market fears. When things are good, suppliers load up, but in hard times the oversupply of trucks and weak demand from shippers can lead to quickly declining rates and a prolonged downturn for the industry, often coupled with more widespread economic malaise.