Cummins Inc. (NYSE:CMI) reported second-quarter earnings on Tuesday that significantly outpaced analyst forecasts, with adjusted earnings per share of $6.43, beating estimates by $1.17. Revenue totaled $8.6 billion, surpassing the consensus estimate of $8.47 billion.
Despite a 2% year-over-year revenue decline, the engine manufacturer achieved strong profitability, driven by record performances in its Power Systems and Distribution segments. Following the announcement, Cummins shares rose 0.7%.
“We delivered strong second quarter results, driven by record profitability in our Power Systems and Distribution segments,” said Jennifer Rumsey, Chair and CEO. “Our employees’ resilience and commitment continue to power our success in a dynamic environment.”
The company reported EBITDA of $1.6 billion, or 18.4% of sales, up from 15.3% a year earlier. Net income increased to $890 million from $726 million in the prior-year quarter.
Cummins faces mixed market conditions, with strong demand for power generation equipment contrasting with weakness in more economically sensitive sectors like trucking. North American sales dropped 6%, while international revenues rose 5%, led by higher demand in Europe and China.
The Power Systems segment led growth with sales up 19% to $1.9 billion and segment EBITDA of $430 million (22.8% margin). The Distribution segment also performed well, with revenue increasing 7% to $3.0 billion and EBITDA of $445 million (14.6% margin).
However, the Engine segment experienced an 8% revenue decline to $2.9 billion, and the Components segment fell 9% to $2.7 billion. The Accelera segment, focused on zero-emission technology, reported a 5% revenue decrease to $105 million and an EBITDA loss of $100 million.
Due to economic uncertainty, Cummins did not reinstate full-year guidance. The company also announced a quarterly dividend increase from $1.82 to $2.00 per share, marking 16 consecutive years of dividend growth.
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