10-Q · May 5, 2026
Cummins Inc. reported Q1 2026 revenue of $8.4 billion, a 3% increase year-over-year, but fell short of analysts' EPS estimate with diluted EPS of $4.71. The company is optimistic about revenue growth in the power…
Earnings analysis · 10-Q
CMI earnings analysis
Filed August 4, 2026 · Our reading of the company's report
The latest report
Cummins delivered strong Q2 top-line growth, with revenue up 9% to $9.457 billion and diluted EPS up 5% to $6.73, powered by data-center-related power-generation demand and international construction activity. Power…
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Cummins delivered strong Q2 top-line growth, with revenue up 9% to $9.457 billion and diluted EPS up 5% to $6.73, powered by data-center-related power-generation demand and international construction activity. Power Systems led with 19% sales growth and 28% EBITDA growth, while operating cash flow increased to $1.808 billion for the first half. The constructive outlook is tempered by core Engine and Components margin contraction, ongoing Accelera losses, and policy-driven trade and emissions-regulation uncertainty.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $6.73
What stood out
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Revenue and EPS increased year over year
Q2 net sales rose $814 million, or 9%, year over year to $9.457 billion; sequentially, sales increased $1.059 billion from implied Q1 sales of $8.398 billion. Diluted EPS rose $0.30, or 5%, to $6.73 from $6.43.
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Power Systems growth accelerated
Power Systems was the principal growth engine: sales increased $366 million, or 19%, to $2.255 billion and EBITDA increased $122 million, or 28%, to $552 million. Power-generation sales within the segment rose $331 million, or 27%, to $1.536 billion, led by China and North America.
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Operating cash flow strengthened sharply
Cash from operations was $1.808 billion in the first six months of 2026, up $1.026 billion from $782 million a year earlier. Capital expenditures were $438 million, implying strong cash conversion, although free cash flow is not explicitly reported in the filing.
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Liquidity and leverage remain solid
Liquidity remained substantial, with $3.924 billion of cash, cash equivalents and marketable securities plus $3.652 billion of revolving-credit capacity at June 30, 2026. The debt-to-capital ratio improved to 35.6% from 36.0% at December 31, 2025.
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Capital returns increased
Shareholder distributions continued: Cummins repurchased $468 million of stock in the first half and raised its quarterly dividend 10%, from $2.00 to $2.20 per share, in July 2026.
What to watch
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Margin pressure despite higher revenue
Profitability lagged sales growth: gross margin declined 0.3 percentage points year over year to 26.1%, while operating income increased only 4% to $1.279 billion on 9% sales growth. Higher compensation costs drove SG&A up $114 million, or 15%, to $893 million.
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Core segment margins contracted
Engine EBITDA declined $14 million to $386 million and Components EBITDA declined $16 million to $381 million despite sales growth. Their EBITDA margins fell to 12.5% from 13.8% and to 13.2% from 14.7%, respectively.
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Accelera losses and fuel-cell exit charge
Accelera remained loss-making, reporting a $69 million Q2 EBITDA loss; for the first six months its EBITDA loss widened $160 million to $346 million. The company also recorded a $199 million net charge related to the low-pressure fuel-cell business sale and settlement, including a $175 million net payment.
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GHG-credit regulatory exposure
The filing states there were no formal Item 1A risk-factor additions or amendments versus the 2025 10-K. However, management identifies a potential non-cash expense of up to $89 million if future NHTSA rulemaking makes its June 30, 2026 GHG compliance credits minimally valuable or valueless.
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Working-capital build and trade uncertainty
Accounts receivable increased $767 million to $6.585 billion and inventories increased $575 million to $6.397 billion since December 31, 2025; days sales outstanding rose to 63 from 60. Management also cites tariffs and trade disruptions as possible future cost and demand headwinds, although their net impact was immaterial in the first half.
Management's outlook
The 10-Q does not provide numeric revenue or EPS guidance. Management expects Power Systems demand and North American medium- and heavy-duty truck demand to remain strong through the remainder of 2026, but warns tariffs, inflation, trade disruptions and the Iran conflict could negatively affect earnings. Capital expenditures are planned at $1.35 billion to $1.45 billion in 2026, with approximately 60% in North America.
Earlier filings 4
10-K · February 10, 2026
Cummins reports 2025 net sales of $33.67 billion and diluted EPS of $20.50, with operating income of $4.025 billion and strong operating cash flow of $3.621 billion. Results were mixed: Power Systems and Distribution…
10-Q · November 6, 2025
Cummins reported Q3 net sales of $8,317 million and diluted EPS of $3.86. Revenue was down modestly year-over-year while gross margin and operating income declined; cash, marketable securities and operating cash flow…
10-Q · November 5, 2024
Cummins reported Q3 net sales of $8,456 million and diluted EPS of $5.86, driven by margin expansion and a large divestiture-related gain year-to-date. Revenue was essentially flat year-over-year (+$25 million) while…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.