Cummins now expects full-year sales of $17 billion, down $1 billion from its prior view.

"Investors expected a guidance cut from Cummins this quarter but this does look to be a bit more than expected," William Blair & Company analyst Lawrence De Maria said.

Chief Executive Tom Linebarger said Cummins had lowered its full-year revenue forecast for several markets, with the most significant changes made in the North America heavy duty truck and the international power generation markets.

"Demand in China has weakened in most end markets and we have also lowered our forecast for global mining revenues," Linebarger said.

He added that Cummins will take a number of actions to offset the fall in demand, including planned work-week reductions, shutdowns at some manufacturing plants, and targeted workforce reductions.

The company expects to cut between 1000 and 1500 jobs by the end of the year. It employed about 43,900 workers worldwide, as of December 31 2011.

Cummins shares were trading down 4 percent at $87.10 in extended trade, after closing at $90.84 on the New York Stock Exchange.

(Reporting by Mridhula Raghavan in Bangalore; Editing by Supriya Kurane, Anthony Kurian)

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