Cummins beats quarterly revenue estimates on generator demand; tariff concerns linger (updated)

Cummins

05/08/2025 17:09

Updates shares; adds CFO comment in paragraph 4; analyst comment in paragraph 5; details throughout

By Apratim  Sarkar and Abhinav Parmar

Aug 5 - U.S. truck engine maker Cummins Inc CMI.N on Tuesday reported second-quarter revenue above Wall Street estimates, driven by strong demand for its power generation systems, despite uncertainties surrounding the impact of tariffs.

Shares of the company were up about 3% in afternoon trading.

The company's power generation products, such as generators, have seen strong demand from AI-driven investments towards data centers.

However, it expects North America truck demand to sharply decline in the third quarter, as tariff uncertainties drag new truck orders to multi-year lows.

"We view current order levels as unsustainably low, but immediate catalysts for recovery are not yet clear," CFO Mark Smith said on a post-earnings conference call.

However, "favorable pricing within light-duty markets continued to benefit margin performance within engines," according to Jefferies analyst Stephen Volkmann.

Cummins declined to reinstate its full-year revenue forecast, withdrawn last quarter, stating it has not yet felt the full impact of tariffs, with their duration and scale still uncertain.

The company added it has worked to offset tariff impacts and expects to be near price-cost neutral by the fourth quarter, despite a hit to its second-quarter profitability.

Its power systems segment revenue rose 19% to $1.89 billion in the quarter, while the components segment fell 9% and the engine segment declined 8%.

Cummins posted second-quarter revenue of $8.64 billion, as compared to $8.8 billion a year earlier. Analysts, on average, had expected $8.44 billion, according to data compiled by LSEG.

The Indiana-based company reported a net income of $890 million or $6.43 per share, compared to $726 million or $5.26 per share a year ago.

 (Reporting by Apratim Sarkar and Abhinav Parmar; Editing by Vijay Kishore)

 ((Apratim.Sarkar@thomsonreuters.com;))