Cummins Inc.’s (CMI  – Analyst Report) adjusted earnings per share decreased 5.6% to $2.02 in the third quarter of 2016 from $2.14 earned in the year-ago quarter. The bottom line, however, surpassed the Zacks Consensus Estimate of $1.93. Including the impact of one-time items, net income fell to $289 million from $380 million in the third quarter of 2015.

Revenues declined 9% year over year to $4.19 billion in the reported quarter. Moreover, the figure missed the Zacks Consensus Estimate of $4.26 billion. The year-over-year decline was due to lower truck production in North America and weak international demand for power generation equipment.

Operating income decreased significantly to $384 million from $557 million a year ago. Earnings before interest and taxes (“EBIT”) dropped to $398 million (9.5% of sales) from $577 million (12.5% of sales) a year ago.

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Segment Performance

Sales in the Engine segment fell 12% to $1.9 billion due to a 13% decline in on-highway revenues, resulting from weaker heavy and medium-duty truck production in North America. The segment’s EBIT decreased to $89 million (4.8% of sales) from $217 million (10.3% of sales) a year ago.

Sales at the Components segment fell 8% to $1.1 billion owing to lower sales in North America, attributable to lower medium and heavy-duty truck production, partially offset by higher revenues in China. This segment’s EBIT declined to $148 million (12.9% of sales) from $156 million (12.6% of sales) in the prior-year quarter.

Sales at the Power Systems segment fell 13% to $856 million due to a drop in demand for power generation equipment and industrial engines in Asia, the Middle East and Africa. The segment’s EBIT declined to $59 million (6.9% of sales) in third-quarter 2016 from $74 million (7.5% of sales) in third-quarter 2015.

Sales at the Distribution segment dropped 3% to $1.5 billion. Revenues benefited from the company’s acquisitions undertaken. However, this gain was offset by adverse currency movements and lower organic sales. The segment’s EBIT fell to $96 million (6.4% of sales) from $123 million (7.9% of sales) a year ago.