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Cummins' Q1 Earnings Beat on Strong Power Systems Results
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Key Takeaways
CMI's Q1 2026 adjusted EPS rose 3.2% to $6.15 and revenues grew 2.7% to $8.40B.
CMI's Power Systems sales jumped 19% to $1.96B and EBITDA margin improved to 29.5%.
CMI raised 2026 revenue growth view to 8-11% and EBITDA margin to 17.75%-18.5%.
Cummins Inc. (CMI - Free Report) delivered adjusted earnings of $6.15 per share in the first quarter of 2026, up 3.2% year over year and 9.8% above the Zacks Consensus Estimate. Revenues of $8.40 billion rose 2.7% from the year-ago quarter and topped the consensus mark by 0.9%.
The quarter reflected solid execution in key end markets, highlighted by an adjusted EBITDA margin of 17.7% of sales. Strength in power generation, particularly for data center-related demand, stood out as a meaningful contributor to results.
CMI’s Engine Results Soften on North America Demand
CMI’s Engine segment posted sales of $2.67 billion, down 4% year over year amid the decline in lower medium-duty and heavy-duty truck demand in the United States, which more than offset stronger construction-related demand in China.
Profitability in the segment was pressured as well. Segment EBITDA was $279 million (down from $458 million in the first quarter of 2025) and the margin declined to 10.4% (compared with 16.5% in the year-ago quarter), reflecting lower volumes and higher compensation costs.
Cummins’ Components segment generated $2.53 billion of sales, a 5% decline from the prior-year period. The drop was tied primarily to softer heavy- and medium-duty demand in North America, while international demand improved in markets such as China and Brazil.
Segment EBITDA totaled $337 million, translating to a 13.3% margin, down from $382 million or 14.3% of sales. Lower volumes weighed on the margin performance versus the year-ago quarter.
CMI’s Distribution Business Benefited From Power Demand
CMI’s Distribution segment was a bright spot, with sales rising 7% year over year to $3.12 billion. Growth was driven by increased demand for power generation products, with particularly strong momentum tied to data center applications.
Segment EBITDA increased to $444 million, and the margin expanded to 14.2% from 12.9% of sales. Higher volumes more than offset cost pressures, including higher compensation expense, supporting improved profitability.
Cummins’ Power Systems Segment Drove Upside
Cummins’ Power Systems segment delivered the sharpest acceleration in the quarter. Sales climbed 19% year over year to $1.96 billion, supported by increased power generation demand across North America and international markets, including China and the Asia Pacific.
The segment also showed meaningful operating leverage. EBITDA rose to $577 million from $389 million in the year-ago quarter, and the margin improved to 29.5%, helped by higher volumes, favorable pricing, and the benefit of tariff recoveries cited in the company’s quarterly materials.
CMI’s Accelera Charge Masked Underlying Progress
Within Accelera, sales were $101 million, down 2% year over year. The segment incurred a $199 million charge tied to completing the sale of its low-pressure fuel cell business. Excluding the charge, Accelera’s EBITDA loss was $78 million, with losses driven by costs associated with developing electric powertrains, fuel cells and electrolyzers, as well as products supporting battery-electric vehicles.
Cummins’ Financial Position
Cummins ended the quarter with $2.61 billion in cash and cash equivalents. Marketable securities were $568 million, taking total cash, cash equivalents and marketable securities to $3.18 billion. Long-term debt was $6.73 billion as of March 31, 2026.
Cash generation improved year over year, with operating cash flow of $309 million in the quarter. Cummins returned $519 million in the first quarter through dividends and share repurchases.
Cummins Raises 2026 Outlook
Cummins raised its full-year 2026 outlook, thanks to strengthening demand across several markets, particularly North America on-highway and power generation. The company now expects 2026 revenues to increase 8-11% (up from the prior forecast of 3-8% growth year over year) and anticipates an EBITDA margin of 17.75% to 18.5% (up from 17-18% guided earlier), excluding first-quarter fuel cell-related charges.
Key Releases From the Auto Space
General Motors (GM - Free Report) delivered first-quarter 2026 adjusted earnings of $3.70 per share, which rose 33% year over year and topped the Zacks Consensus Estimate of $2.61. Revenues of $43.62 billion slipped 0.9% year over year and missed the consensus mark of $43.94 billion by 0.7%. Management increased full-year 2026 EBIT-adjusted guidance to $13.5-$15.5 billion (versus $13-$15 billion guided earlier) and lifted its adjusted earnings outlook to $11.50-$13.50 per share (compared with the prior forecast of $11-$13 per share). General Motors now expects gross tariff costs of $2.5-$3.5 billion in 2026, down from the prior forecast of $3-$4 billion, while maintaining its adjusted automotive free cash flow target of $9-$11 billion.
Ford (F - Free Report) reported first-quarter 2026 adjusted earnings per share of 66 cents, which beat the Zacks Consensus Estimate of 20 cents and increased from 14 cents in the prior-year quarter. Ford’s total automotive revenues rose 6.4% year over year to $39.82 billion, which surpassed the Zacks Consensus Estimate of $39.34 billion by 1.21%. The company’s consolidated first-quarter revenues came in at $43.3 billion, up 6.4% year over year. Ford raised full-year 2026 adjusted EBIT guidance to $8.5-$10.5 billion, up from $8-$10 billion. It reiterated its adjusted free cash flow outlook of $5-$6 billion.
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Cummins' Q1 Earnings Beat on Strong Power Systems Results
Key Takeaways
Cummins Inc. (CMI - Free Report) delivered adjusted earnings of $6.15 per share in the first quarter of 2026, up 3.2% year over year and 9.8% above the Zacks Consensus Estimate. Revenues of $8.40 billion rose 2.7% from the year-ago quarter and topped the consensus mark by 0.9%.
The quarter reflected solid execution in key end markets, highlighted by an adjusted EBITDA margin of 17.7% of sales. Strength in power generation, particularly for data center-related demand, stood out as a meaningful contributor to results.
CMI currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Cummins Inc. Price, Consensus and EPS Surprise
Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote
CMI’s Engine Results Soften on North America Demand
CMI’s Engine segment posted sales of $2.67 billion, down 4% year over year amid the decline in lower medium-duty and heavy-duty truck demand in the United States, which more than offset stronger construction-related demand in China.
Profitability in the segment was pressured as well. Segment EBITDA was $279 million (down from $458 million in the first quarter of 2025) and the margin declined to 10.4% (compared with 16.5% in the year-ago quarter), reflecting lower volumes and higher compensation costs.
Cummins’ Components Segment Faces Volume Headwinds
Cummins’ Components segment generated $2.53 billion of sales, a 5% decline from the prior-year period. The drop was tied primarily to softer heavy- and medium-duty demand in North America, while international demand improved in markets such as China and Brazil.
Segment EBITDA totaled $337 million, translating to a 13.3% margin, down from $382 million or 14.3% of sales. Lower volumes weighed on the margin performance versus the year-ago quarter.
CMI’s Distribution Business Benefited From Power Demand
CMI’s Distribution segment was a bright spot, with sales rising 7% year over year to $3.12 billion. Growth was driven by increased demand for power generation products, with particularly strong momentum tied to data center applications.
Segment EBITDA increased to $444 million, and the margin expanded to 14.2% from 12.9% of sales. Higher volumes more than offset cost pressures, including higher compensation expense, supporting improved profitability.
Cummins’ Power Systems Segment Drove Upside
Cummins’ Power Systems segment delivered the sharpest acceleration in the quarter. Sales climbed 19% year over year to $1.96 billion, supported by increased power generation demand across North America and international markets, including China and the Asia Pacific.
The segment also showed meaningful operating leverage. EBITDA rose to $577 million from $389 million in the year-ago quarter, and the margin improved to 29.5%, helped by higher volumes, favorable pricing, and the benefit of tariff recoveries cited in the company’s quarterly materials.
CMI’s Accelera Charge Masked Underlying Progress
Within Accelera, sales were $101 million, down 2% year over year. The segment incurred a $199 million charge tied to completing the sale of its low-pressure fuel cell business. Excluding the charge, Accelera’s EBITDA loss was $78 million, with losses driven by costs associated with developing electric powertrains, fuel cells and electrolyzers, as well as products supporting battery-electric vehicles.
Cummins’ Financial Position
Cummins ended the quarter with $2.61 billion in cash and cash equivalents. Marketable securities were $568 million, taking total cash, cash equivalents and marketable securities to $3.18 billion. Long-term debt was $6.73 billion as of March 31, 2026.
Cash generation improved year over year, with operating cash flow of $309 million in the quarter. Cummins returned $519 million in the first quarter through dividends and share repurchases.
Cummins Raises 2026 Outlook
Cummins raised its full-year 2026 outlook, thanks to strengthening demand across several markets, particularly North America on-highway and power generation. The company now expects 2026 revenues to increase 8-11% (up from the prior forecast of 3-8% growth year over year) and anticipates an EBITDA margin of 17.75% to 18.5% (up from 17-18% guided earlier), excluding first-quarter fuel cell-related charges.
Key Releases From the Auto Space
General Motors (GM - Free Report) delivered first-quarter 2026 adjusted earnings of $3.70 per share, which rose 33% year over year and topped the Zacks Consensus Estimate of $2.61. Revenues of $43.62 billion slipped 0.9% year over year and missed the consensus mark of $43.94 billion by 0.7%. Management increased full-year 2026 EBIT-adjusted guidance to $13.5-$15.5 billion (versus $13-$15 billion guided earlier) and lifted its adjusted earnings outlook to $11.50-$13.50 per share (compared with the prior forecast of $11-$13 per share). General Motors now expects gross tariff costs of $2.5-$3.5 billion in 2026, down from the prior forecast of $3-$4 billion, while maintaining its adjusted automotive free cash flow target of $9-$11 billion.
Ford (F - Free Report) reported first-quarter 2026 adjusted earnings per share of 66 cents, which beat the Zacks Consensus Estimate of 20 cents and increased from 14 cents in the prior-year quarter. Ford’s total automotive revenues rose 6.4% year over year to $39.82 billion, which surpassed the Zacks Consensus Estimate of $39.34 billion by 1.21%. The company’s consolidated first-quarter revenues came in at $43.3 billion, up 6.4% year over year. Ford raised full-year 2026 adjusted EBIT guidance to $8.5-$10.5 billion, up from $8-$10 billion. It reiterated its adjusted free cash flow outlook of $5-$6 billion.