Cummins Rides AI Data Center Boom to Record Profits, but Trouble Brews in Pickup Trucks

Cummins Inc. (NYSE:CMI) stock traded lower Thursday after the company reported mixed third-quarter 2026 results, with earnings meeting Wall Street expectations but revenue falling short.

The AI data center boom helped Cummins deliver record earnings and EBITDA, with Power Systems sales rising 15% to $2.29 billion. However, weakening pickup truck orders in North America clouded the outlook, prompting the company to lower the top end of its 2026 revenue forecast.

The engine maker posted record earnings per share and EBITDA, driven by strong demand for power generation equipment used in data centers.

“We delivered record EBITDA and earnings per share in the third quarter, led by continued strength in our Power Systems business,” said Jennifer Rumsey, Cummins’ chair and CEO.

Rumsey said global demand for power generation equipment remained exceptionally strong. However, weaker pickup truck orders weighed on the company’s outlook.

Cummins Revenue Misses Estimates Despite Record Profit

Third-quarter revenue rose 13% year over year to $9.438 billion, missing Wall Street’s $9.850 billion estimate.

Diluted earnings reached $8.25 per share, matching expectations and rising from $3.86 a year earlier.

Net income more than doubled to $1.14 billion from $536 million.

EBITDA hit a record $1.786 billion, or 18.9% of sales, compared with $1.187 billion, or 14.3%, a year earlier.

Results included a favorable tax benefit of 54 cents per share.

Strong Truck Demand Boosts Engine Sales

Engine sales jumped 20% to $3.13 billion, while the EBITDA margin expanded to 13.5% from 10%.

Components sales climbed 23% to $2.86 billion, with the margin improving to 14.3% from 12.5%.

Stronger truck demand supported both businesses.

Total engine shipments rose to 163,700 from 135,100 a year earlier. Heavy-duty shipments increased to 33,200 from 22,400, while medium-duty shipments climbed to 85,700 from 63,100.

Data Center Boom Fuels Power Systems Growth

Power Systems sales rose 15% to $2.29 billion, driven by strong global demand for power generation equipment, particularly from data centers.

The segment’s EBITDA margin expanded to 25.4% from 22.9%.

Distribution sales increased 4% to $3.31 billion, although the margin slipped to 13.9% from 15.5%.

Accelera sales fell 15% to $103 million, while the business recorded a $56 million EBITDA loss.

Cummins also secured its largest battery energy storage deployment to date for a major U.S. data center project.

Cummins Narrows 2026 Sales Outlook

Operating cash flow increased to $1.405 billion from $1.305 billion, while capital expenditures totaled $303 million.

Cummins ended the quarter with $3.571 billion in cash and equivalents and $6.634 billion in long-term debt.

The company’s debt-to-capital ratio improved to 34.4% from 36.8%.

Cummins narrowed its fiscal 2026 revenue outlook to $37.037 billion from a previous range of $37.037 billion to $38.047 billion. The revised forecast fell below Wall Street’s $37.673 billion estimate.

The company expects revenue to grow approximately 10%, with an EBITDA margin of about 18.2%.

Management cited weaker-than-expected North American pickup truck demand but said global power generation and North American heavy-duty truck markets remained strong.

CMI Price Action: Cummins shares fell 1.27% to $465.86 at the time of publication Thursday, according to Benzinga Pro data.

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