Cummins Q2 Earnings Surpass Estimates, Revenues Decline Y/Y

Cummins Inc. CMI reported second-quarter 2025 earnings of $6.43 per share, which surpassed the Zacks Consensus Estimate of $4.99 and increased from $5.26 recorded in the corresponding quarter of 2024. Higher-than-expected sales in the Distribution and Power Systems segments resulted in the outperformance. Cummins’ revenues totaled $8.64 billion, which beat the Zacks Consensus Estimate of $8.47 billion but declined from $8.8 billion recorded in the year-ago quarter. 

Cummins Inc. Price, Consensus and EPS Surprise

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

Key Takeaways

In the reported quarter, sales in the Engine segment were down 8% year over year to $2.90 billion. The metric also missed our estimate of $2.91 billion. Sales in North America and International markets decreased 8% and 7% year over year, respectively, due to weaker on-highway demand in the United States and Mexico. The segment’s EBITDA fell to $400 million (accounting for 13.8% of sales) from $445 million (14.1% of sales) in the year-ago period and missed our estimate of $428.4 million.

Sales in the Distribution segment totaled $3 billion, which rose 7% year over year and topped our projection of $2.83 billion. Sales in North America rose 9% due to increased demand for power generation products, while international sales rose by 4%. The segment’s EBITDA came in at $445 million (14.6% of sales), which increased from the year-ago quarter’s $314 million (11.1% of sales) and surpassed our estimate of $366 million.

Sales in the Components segment totaled $2.7 billion, down 9% from the prior-year quarter. Sales also missed our estimate of $2.74 billion. Revenues in North America decreased 15% and international sales were flat due to weaker on-highway demand in the United States. The segment’s EBITDA was $397 million (14.7% of sales), lower than the year-ago figure of $406 million (13.6% of sales). The metric, however, topped our estimate of $373.6 million.

Sales in the Power Systems segment rose 19% from the year-ago quarter to $1.9 billion and beat our estimate of $1.64 billion. While North America sales grew 23%, international sales rose 16% due to increased demand for power generation. The segment’s EBITDA rose to $430 million (22.8% of sales) from $301 million (18.9% of sales) and beat our estimate of $327.6 million.

Sales in the Accelera segment came in at $105 million, which fell 5% from the year-ago level and lagged our estimate of $112.5 million. The segment incurred a pretax loss of $100 million, narrower than our estimate of a loss of $102.5 million. Investment in zero-emission contributed to the EBITDA losses.

CMI's Financials

Cummins’ cash and cash equivalents were $2.32 billion as of June 30, 2025, up from $1.67 billion as of Dec. 31, 2024. Long-term debt totaled $6.81 billion, up from $4.78 billion as of Dec. 31, 2024.

Cummins’s Zacks Rank & Key Picks

CMI carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are Ferrari N.V. RACE, PHINIA Inc. PHIN and XPeng Inc. XPEV. While RACE and PHIN sport a Zacks Rank #1 (Strong Buy) each at present, XPEV carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for RACE’s fiscal 2025 earnings and sales indicates year-over-year growth of 12.1% and 13.48%, respectively. EPS estimates for fiscal 2025 and 2026 have improved 5 cents each over the past 30 days.

The Zacks Consensus Estimate for PHIN’s 2025 sales and earnings implies year-over-year growth of 0.58% and 13.99%, respectively. EPS estimates for 2025 and 2026 have improved 23 cents and 19 cents, respectively, in the past 30 days.

The Zacks Consensus Estimate for XPEV’s 2025 sales and earnings indicates year-over-year growth of 102% and 66.7%, respectively. EPS estimates for 2025 have improved 7 cents in the past 90 days. The same for 2026 has increased by a penny in the past 60 days.

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This article originally published on Zacks Investment Research (zacks.com).

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