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Cummins Chair and CEO Jennifer Rumsey.
Cummins Inc. on Thursday reported a quarterly decline in revenue during the third quarter as what company officials described as a record-setting performance in its power systems segment largely offset by a sharp decline in the North America truck market.
The Columbus-based company reported third quarter revenues of $8.3 billion, down 2% from the same quarter in 2024. Sales in North America declined 4%, while international revenues increased 2% due to higher demand in China and Europe.
Overall net income was $536 million, or $3.86 per share, during the July-September period, down from $809 million, or $5.86 per share, during the same period last year. The results also include $240 million non-cash charge related to its electrolyzer business within Accelera and $36 million in costs associated with the implementation of President Donald Trump’s “big, beautiful bill,” the company said.
“Lower sales were primarily driven by weaker North America heavy and medium-duty truck demand, with unit volumes declining 40% from a year ago, which was largely offset by continued strength in our global power generation markets, higher light-duty truck volumes and favorable pricing,” Cummins Chair and CEO Jennifer Rumsey said Thursday.
Segment performances
Engine: Sales of $2.6 billion in the third quarter represented a decrease of 11%. Revenues decreased 12% in North America and 5% in international markets due to lower medium-duty and heavy-duty truck demand in the United States and Mexico.
Components: Third-quarter sales of $2.3 billion were down 15% compared to the same quarter last year. Revenues in North America decreased by 24% and international sales were flat primarily due to lower medium-duty and heavy-duty truck demand in the United States.
Distribution: Sales of $3.2 billion rose 7% compared to the same period in 2024. Revenues in North America increased 13% due to increased demand for power generation, while international sales declined by 3%.
Power Systems: Sales of $2 billion increased 18% compared to the third quarter 2024. Revenues in North America increased 20% and international sales increased 17% driven primarily by increased power generation demand, particularly for data center markets in North America, India and China.
Accelera: Sales of $121 million were up 10% compared to the same period last year. Revenues increased due to higher eMobility demand.
Future outlook
Cummins officials said uncertainty continues to weigh on several of the company’s end markets, particularly the North American truck sector, where tariffs and an ongoing federal review of emissions regulations have impacted demand.
Rumsey said gaining clarity over emissions standards “will be critical for our industry,” adding that she is hopeful that the U.S. Environmental Protection Agency will conclude its review of 2027 regulations in the coming months.
Company executives said they are hopeful that the fourth quarter could mark the low point of the “protracted and difficult slowdown” in North American on-highway markets.
“The pace of recovery in these markets will depend on broader economic sentiment and the clarity of trade and regulatory policies,” Rumsey said.
Cummins did not reinstate its full-year financial guidance on Thursday, citing a “dynamic environment” and uncertainty in many of its end markets. The company withdrew its guidance in May amid uncertainty over the Trump administration’s tariff policies.
Cummins Vice President and Chief Financial Officer Mark Smith said that the company is hopeful to reinstate its full-year guidance in February, “as we hope to have more clarity on trade and regulatory policies that hopefully will provide stability for the North American truck industry and the broader industrial economy.”
“You can generally tell from our tone that stability going forward would be really, really helpful,” Smith said. “…Outside of a broad economic recession or what I’d call a hard emissions change, this is the sharpest decline in truck orders that many of these people here a long time (at Cummins) have witnessed. And it’s not all down to tariffs, but they also don’t help with that uncertainty.”
Cummins officials said the company’s tariff costs increased during the third quarter, but they “managed the net hit to our profitability through price recovery and other actions.”
Despite the uncertainty, Cummins officials said they believe the company is well-positioned for the future.
“Our diversified portfolio and global network leave us well-positioned to support our customers and continue to drive improvement in performance cycle over cycle,” Smith said. “As we have discussed, we expect demand for power systems and distribution to remain strong through the fourth quarter and going into 2026.”
Analysts react
Local analysts emphasized the contrast between the revenue declines in Cummins’ engine and components segments and the revenue growth seen in the company’s power systems and distribution segments.
“It appears to be kind of an unprecedented period,” said Mike Petry, senior equity analyst at Columbus-based Kirr, Marbach and Co. “(Company officials) said on the call (that) the declines in the North American truck segment are some of the steepest that anyone that works there at Cummins today has seen in their careers. And yet, we’re seeing growth in the consolidated business. It’s a really interesting dynamic … with that push and pull with the old economy versus this kind of new tech-driven boom.”
“The growth in power systems is … offsetting the weakness in that core engine business,” Petry added.
Craig Kessler, president and chief investment officer at Columbus-based Kessler Investment Group, characterized the performance by Cummins’ power systems segment as a “paradigm shift” for a company that has historically been best known for diesel engines.
“The Power Gen side is really the growth engine for the company, and I think it will continue to be that way,” Kessler said. “…(The) power systems (segment) is $2 billion in revenue (in the third quarter), versus (the) engine (segment) at $2.6 billion. Talk about a paradigm shift for the company from its history.”
“I think we are in the midst of a new industrial revolution drive by AI, and I think Cummins is positioned well to be a beneficiary of that going forward,” Kessler added.
