NEW YORK—Moody's Investors Service on Friday raised the senior unsecured debt of Cummins Inc. and changed its outlook on the diesel engine maker to "positive."
Moody's cited Cummins' product and geographic diversity and "prudent" financial policies that should help it cope with cyclical key markets.
The agency raised Cummins' senior unsecured rating to "Baa1" from "Baa2."
Moody's said Cummins has begun a long-term strategy to reduce volatility in earnings and cash flow by steps such as reducing costs in its truck-engine operations and expanding joint ventures to make truck engines in emerging markets.
The strategy helped Cummins offset a downturn in the North American truck industry in 2008 and 2009.
The positive outlook could lead to another upgrade in the next 12 to 18 months, Moody's said.
Cummins is based in Columbus, Ind.
Cummins' shares fell 76 cents to close at $94.02.