Cummins Inc. (NYSE:CMI) shares fell more than 8% after the engine manufacturer reported second-quarter 2026 results that featured record revenue but earnings below Wall Street expectations.
While demand remained strong across several end markets and the company raised its full-year outlook, investors focused on the weaker-than-expected profit performance.
Revenue Beats Forecasts but EPS Disappoints
Cummins reported adjusted earnings of $6.73 per share, missing the analyst consensus estimate of $7.26.
Revenue climbed to a record $9.5 billion, exceeding market expectations of $9.33 billion and representing a 9% increase from the same period last year.
Net income attributable to Cummins rose to $932 million, or 9.9% of sales, compared with $890 million a year earlier.
Higher Compensation Costs Weigh on Margins
EBITDA margin declined to 17.5% of sales from 18.4% in the second quarter of 2025.
The company said the lower profitability primarily reflected higher incentive compensation expenses linked to expectations for record full-year financial performance.
The earnings shortfall overshadowed the otherwise solid quarterly results, sending the shares 8.2% lower.
CEO Highlights Strong Customer Demand
Chair and Chief Executive Officer Jennifer Rumsey said the company continued to benefit from favourable market conditions despite macroeconomic uncertainty.
“Cummins delivered record second-quarter results, reflecting robust customer orders for standby power for data centers and improving North American truck markets,” said Jennifer Rumsey, Chair and CEO of Cummins. “Rising demand and disciplined execution drove record performance as we continue to perform well in a complex macroeconomic environment.”
Company Raises Full-Year Outlook
Cummins increased its full-year 2026 revenue growth forecast to a range of 10% to 13%, up from its previous guidance of 8% to 11%.
The updated outlook reflects stronger demand across several of the company’s key markets.
The company also raised its expected EBITDA margin range to between 18.0% and 18.5%, compared with its previous guidance of 17.75% to 18.5%.
Power Systems Continues to Lead Growth
Revenue in North America increased 8% year over year, while international sales advanced 12%, supported by strong demand in China.
The Power Systems division delivered the strongest performance, with revenue rising 19% as demand for data center power generation equipment accelerated across the United States, China and the Asia-Pacific region.
Cummins also returned $501 million to shareholders through dividends and share repurchases during the quarter and increased its quarterly dividend from $2.00 to $2.20 per share.
Cummins stock price
