Cummins Inc. (NYSE:CMI) stock traded lower Tuesday after the power solutions company reported second-quarter 2026 results, as an earnings miss outweighed record revenue and a raised full-year sales outlook.
Revenue rose 9% to $9.457 billion from $8.643 billion and beat the $9.330 billion estimate. Diluted GAAP EPS increased to $6.73 from $6.43 but missed the $7.33 estimate.
Earnings Miss Overshadows Record Revenue
Net income attributable to Cummins rose to $932 million from $890 million. EBITDA increased to $1.653 billion from $1.587 billion, though margin narrowed to 17.5% from 18.4%.
Results included $29 million, or 21 cents per share, of unfavorable tax items. Higher incentive compensation pressured margins.
Engine sales rose 6% to $3.084 billion, while EBITDA fell to $386 million and margin declined to 12.5%. Shipments increased to 161,200 units from 147,000.
Improved tariff recovery partly offset higher research, development and freight costs.
Components sales rose 7% to $2.891 billion, with EBITDA of $381 million. Distribution revenue increased 9% to $3.326 billion, while EBITDA rose to $451 million.
Data-Center Demand Lifts Power Systems
Power Systems sales rose 19% to $2.255 billion on strong data-center demand. EBITDA increased to $552 million, with margin expanding to 24.5% from 22.8%.
Accelera sales climbed 38% to $145 million, while its EBITDA loss narrowed to $69 million from $100 million.
Cummins will supply natural-gas generator sets for a Texas data center from 2026 through 2030.
It also revised its 2027 North American launch plans, including a measured X10 and X15 ramp and continued availability of select legacy products.
Cash Flow And Shareholder Returns
Operating cash flow rose to $1.499 billion from $785 million, while capital expenditures were $249 million.
Cash and cash equivalents totaled $3.179 billion, and debt-to-capital was 35.6%.
Cummins returned $501 million through dividends and repurchases and raised its quarterly dividend to $2.20 from $2.00.
Cummins Raises Full-Year Outlook
Cummins raised its 2026 sales outlook to $37.037 billion to $38.047 billion from $36.364 billion to $37.374 billion, compared with the $37.224 billion estimate.
Revenue is expected to rise 10% to 13%, while EBITDA margin is forecast at 18% to 18.5%. Power Systems revenue is projected to increase 14% to 19%, with a 25% to 25.75% margin.
North American heavy-duty truck demand is expected to rise 10% to 15%, while medium-duty demand is forecast to increase 20% to 30%.
On the conference call, CEO Jennifer Rumsey said, "In North America, Cummins expects demand to remain largely flat amid ongoing tariff and interest-rate uncertainty."
CMI Stock Price Activity: Cummins shares were down 3.28% at $627.54 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo by JHVEPhoto via Shutterstock