Cummins Inc. (CMI Quick QuoteCMI - Free Report) emphasized strong global data center demand and improving truck production during its third-quarter 2026 earnings call while acknowledging weaker pickup truck orders and supply constraints that affected revenues.

Management maintained confidence in its long-term profitability targets despite lowering full-year revenue expectations. Discussions also focused on power generation capacity expansion, the 2027 emissions transition and prospects for sustained cash generation.

CMI Trims 2026 Outlook Amid Pickup Weakness

Cummins now expects 2026 revenue growth of approximately 10%, compared with its previous guidance of 10% to 13%. The EBITDA margin forecast stands at approximately 18.2%, within the earlier 18% to 18.5% range.

CEO Jennifer Rumsey attributed the revenue revision primarily to weaker North American pickup truck demand, pressured by elevated diesel prices and interest rates. CFO Mark Smith indicated that fourth-quarter revenue growth should reach approximately 15%, supported by recovering delayed shipments.

CMI reported quarterly earnings of $7.71 per share, missing the Zacks Consensus Estimate of $8.38. Third-quarter revenues of $9.44 billion also lagged the Zacks Consensus Estimate of $9.89 billion.

Cummins Inc. Price, Consensus and EPS Surprise

Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote

Cummins Sees Data Center Orders Extending Into 2028

Rumsey highlighted exceptionally strong global power generation demand, with Power Systems recording $2.3 billion in quarterly revenues and a 25.4% EBITDA margin.

During questions from Wells Fargo, Rumsey disclosed that orders for larger generator sets extend into the second half of 2028. Third-quarter order intake exceeded management's expectations.

International data center orders have accelerated substantially, particularly across China and Southeast Asia. Smith clarified during an Evercore ISI exchange that international data center orders have reached parity with U.S. orders.

CMI Expects Delayed Shipments to Recover

Smith explained during Morgan Stanley's questioning that a supplier problem disrupted Power Systems production and subsequently affected Distribution installations.

Approximately $200 million in expected third-quarter revenues shifted into the fourth quarter. Management expects to recover most delayed shipments before year-end.

Addressing Oppenheimer's concerns about Distribution's projected sequential growth, Smith emphasized that the anticipated increase reflects delayed installations rather than a change in underlying customer demand.

Cummins Navigates Truck Demand and EPA Uncertainty

Rumsey maintained the 2026 North American heavy-duty truck production forecast at 240,000 to 250,000 units but reduced the medium-duty outlook to 125,000 to 130,000 units.

Pickup engine shipment guidance declined to 118,000 to 122,000 units from 125,000 to 140,000 units.

During Citigroup's questioning, Rumsey characterized recent truck market improvement as primarily reflecting recovering underlying demand rather than extensive advance purchases. She also indicated that regulatory uncertainty continues delaying some customer decisions.

CMI Outlines 2027 Product Transition and Capacity Plans

Responding to Morgan Stanley, Rumsey explained that Cummins anticipates a phased launch of its X10 and X15 engine platforms during 2027, with most production remaining on existing platforms.

Management expects the EPA's final regulatory rule in December and plans to pass applicable nonconformance penalties through to customers.

Separately, Rumsey reaffirmed power generation capacity expansion plans, with initial increases expected in 2027 and more substantial additions during 2028. The new 130-liter natural gas engine is expected to contribute more meaningful revenue beginning in 2029.

Cummins Balances Investment With Shareholder Returns

Smith highlighted record quarterly EBITDA of $1.8 billion, representing 18.9% of sales. Higher volumes drove profitability despite increased compensation expenses and emerging freight cost pressures.

Operating cash flow reached $1.4 billion, supporting $661 million in dividends and share repurchases during the quarter.

Management maintained planned 2026 capital investments of $1.35 billion to $1.45 billion while reiterating its objective of returning approximately 50% of operating cash flow to shareholders.

CMI Maintains Focus on Execution and Long-Term Targets

Management's commentary reflected confidence in data center demand and profitability expansion, balanced against continued weakness in pickup trucks and supply chain pressures.

Smith reaffirmed progress toward the company's 2030 targets while cautioning that quarterly Power Systems margins could fluctuate during capacity expansion and product development.

Cummins' Zacks Rank and Style Scores Signals

Cummins currently carries a Zacks Rank #3 (Hold), indicating a neutral near-term earnings revision outlook. The stock holds a Value Score of A, Growth Score of A and Momentum Score of B, alongside a VGM Score of A.

These favorable Style Scores reflect attractive characteristics across valuation, growth and price momentum. However, the Zacks framework places greater emphasis on combining strong Style Scores with a Zacks Rank #1 (Strong Buy) or #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

CMI's current ranking warrants a balanced interpretation despite its favorable Style Scores. Its Zacks Rank may change as analysts revise earnings estimates following the third-quarter results.