Cummins Inc. ( CMI - Analyst Report ) revealed that its Board of Directors has authorized a new share repurchase program and the acquisition of up to $1 billion of the company’s stock. The new repurchase program has been announced at a time when the existing $1 billion share repurchase program is about to end.

Under the existing $1 billion share repurchase program, approved in February 2011, Cummins has repurchased a total of $749 million worth of shares. Of the total amount, $518 million worth of shares have been repurchased in 2011 and the rest $231 million in the first nine months of 2012,

Cummins reported a 19.1% fall in adjusted earnings per share to $1.78 in the third quarter of 2012 from $2.20 in the year-ago quarter. Net income declined 20.6% to $336.0 million from $423.0 million in the third quarter of 2011. With this, profits in the quarter missed the Zacks Consensus Estimate by 6 cents per share.

The decrease in earnings was due to uncertainty in most of the markets served by the company. The company has actively responded to this situation by canceling or delaying some projects, reducing production at some of its manufacturing plants and cutting discretionary expenses. It also plans to reduce workforce by 1000 to 1500 people by the end of this year.

The company’s revenues for the quarter dipped 11% to $4.1 billion, lower than the Zacks Consensus Estimate of $4.2 billion. The decline in revenues was driven by a 21% fall in revenues in the international market, which offset the 2% rise in revenues in North America.

For 2012, Cummins expects revenues of $17.0 billion, which is lower than the previous guidance of $18.0 billion. It also expects EBIT margin of 13.5%, down from the previous estimate of 14.25%–14.75% for the year.

Cummins Inc. is a leading worldwide designer, manufacturer and distributor of diesel and natural gas engines, electric power generation systems, and engine-related components, fuel systems, controls and air handling systems.

The company faces stiff competition from Caterpillar Inc. ( CAT - Analyst Report ) and Navistar International Corporation ( NAV - Analyst Report ) . Currently, the stock retains a Zacks #3 Rank, which translates into a short-term (1 to 3 months) rating of Hold.