CMI

A month has gone by since the last earnings report for Cummins (CMI). Shares have lost about 15.3% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Cummins due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Cummins Inc. before we dive into how investors and analysts have reacted as of late. Cummins reported second-quarter 2026 adjusted earnings of $6.94 per share, which missed the Zacks Consensus Estimate of $7.33 by 5.3%. Higher incentive compensation, research and development spending, freight costs and product coverage expenses put pressure on profitability.Revenues increased 9.4% year over year to $9.46 billion and topped the consensus mark of $9.33 billion by 1.38%. Growth was led by global power generation demand, international construction markets and improving North American truck activity. Engine segment sales increased 6% year over year to $3.08 billion. Total engine shipments rose 9.7% to 161,200 units. North American revenues rose 1%, while international sales jumped 23%, primarily on stronger construction demand in China.Segment EBITDA declined to $386 million from $400 million, while margin contracted to 12.5% from 13.8%. Higher research and development and freight costs outweighed benefits from stronger North American medium-duty truck volumes, China construction demand and improved tariff recovery. Components segment sales advanced 7% to $2.89 billion. Revenues increased 6% in North America and 8% internationally, reflecting stronger truck demand in the United States and China.Segment EBITDA decreased to $381 million from $397 million, with margin falling to 13.2% from 14.7%. Higher product coverage costs were partly offset by favorable pricing, stronger North American truck volumes and increased China on- and off-highway activity. Distribution segment sales rose 9% to a record $3.33 billion. North American revenues climbed 13%, while international revenues increased 1%, driven by demand for power generation products, particularly for data center applications.Segment EBITDA increased slightly to $451 million from $445 million, but margin declined to 13.6% from 14.6%. Higher incentive compensation and freight expenses more than offset increased power generation volumes. Slower parts growth relative to power generation also limited margin expansion. Power Systems sales surged 19% to a record $2.26 billion. Revenues increased 19% in both North America and international markets, supported by data center power demand in the United States, China and Asia Pacific.Segment EBITDA climbed to $552 million from $430 million, while margin expanded to 24.5% from 22.8%. Strong global power generation volumes were the primary driver. Higher China joint venture earnings, favorable production efficiency and pricing boosted results. Power generation sales jumped to $1.54 billion from $1.21 billion, while industrial sales increased to $538 million. Accelera segment sales increased 38% to $145 million, driven by higher electrified powertrain and electrolyzer sales.The segment posted a negative EBITDA loss of $69 million, narrowing from a loss of $100 million a year earlier. The improvement reflected targeted cost-reduction actions previously implemented as Cummins focused zero-emissions investments on its most promising opportunities. Cummins generated record second-quarter operating cash flow of $1.5 billion, up from $785 million. Capital expenditures increased to $249 million from $231 million.Cash, cash equivalents and marketable securities totaled $3.92 billion at quarter-end, compared with $3.61 billion at the end of 2025. Long-term debt declined to $6.74 billion from $6.79 billion. The company returned $501 million through $276 million in dividends and $225 million in share repurchases.Cummins also increased its quarterly dividend to $2.20 per share from $2.00, marking its 17th consecutive annual dividend increase. Cummins now expects full-year 2026 revenues to increase 10-13%, up from its prior projection of 8-11%. The revision reflects stronger demand in North American on-highway markets, China construction and power generation. Management expects the second half of 2026 to be stronger than the first half. The company raised the low end of its EBITDA margin outlook to 18%, resulting in a new range of 18.0-18.5%, excluding first-quarter fuel cell business sale charges. Since the earnings release, investors have witnessed a upward trend in estimates review. The consensus estimate has shifted 5.07% due to these changes. At this time, Cummins has a strong Growth Score of A, a score with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a score of B on the value side, putting it in the second quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Cummins has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cummins Inc. (CMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Looking back on heavy transportation equipment stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Cummins (NYSE:CMI) and its peers. Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings. The 12 heavy transportation equipment stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 8.6% above. Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.4% since the latest earnings results. With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems. Cummins reported revenues of $9.46 billion, up 9.4% year on year. This print exceeded analysts’ expectations by 1.6%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS and EBITDA estimates. The market seems disappointed with the results as the stock is down 8.5% since reporting and currently trades at $594.00. Read our full report on Cummins here, it’s free. With its first trailer reportedly built on two sawhorses, Wabash (NYSE:WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods. Wabash reported revenues of $417.2 million, down 9.1% year on year, outperforming analysts’ expectations by 3.6%. The business had a stunning quarter with an impressive beat of analysts’ EBITDA estimates and revenue guidance for next quarter exceeding analysts’ expectations. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 12.3% since reporting. It currently trades at $11.67. Is now the time to buy Wabash? Access our full analysis of the earnings results here, it’s free. Having designed the industry’s first double-decker railcar in the 1980s, Greenbrier (NYSE:GBX) supplies the freight rail transportation industry with railcars and related services. Greenbrier reported revenues of $576.5 million, down 31.6% year on year, falling short of analysts’ expectations by 5.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations significantly and full-year EPS guidance missing analysts’ expectations significantly. Greenbrier delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 4.3% since the results and currently trades at $45.83. Read our full analysis of Greenbrier’s results here. Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry. Oshkosh reported revenues of $2.92 billion, up 6.7% year on year. This number surpassed analysts’ expectations by 3.3%. It was a very strong quarter as it also logged full-year revenue guidance beating analysts’ expectations and a beat of analysts’ EPS estimates. The stock is down 1.4% since reporting and currently trades at $152.80. Read our full, actionable report on Oshkosh here, it’s free. Developing sirens that warned of air raid attacks or fallout during the Cold War, Federal Signal (NYSE:FSS) provides safety and emergency equipment for government agencies, municipalities, and industrial companies. Federal Signal reported revenues of $670.2 million, up 18.7% year on year. This result met analysts’ expectations. Overall, it was a strong quarter as it also put up full-year EPS guidance exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates. The stock is up 9% since reporting and currently trades at $121.96. Read our full, actionable report on Federal Signal here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Global data center energy usage is expected to rise 26% by 2026 to 565 terawatt-hours, while overall data center power demand will soar by 27% to 132 gigawatts. As grid capacity limits become the most significant bottleneck for hyperscalers, standby and prime continuous power generation systems have evolved into mission-critical equipment. For industrial titans Caterpillar Inc. (NYSE:CAT) and Cummins Inc. (NYSE:CMI), the steady demand for distributed power, along with strong North American construction expenditures, is driving record backlogs and prompting full-year guidance increases across the board. The convergence of infrastructure investment and AI power demand was clearly visible when Caterpillar Inc. (NYSE:CAT) released its second-quarter 2026 results on August 4. Total sales increased 24% year-over-year to $20.5 billion, while adjusted earnings per share hit $8.17, greatly exceeding the $6.20 analyst average expectation and igniting a 9% premarket stock rise. Operating margins increased to 20.9% from 17.3% the previous year, indicating a significant improvement in efficiency. Construction Industries led the way, growing 35% to $8.3 billion on a 50% increase in North American demand, while Power & Energy increased 17% to $8.2 billion. Trade difficulties also eased during the quarter. After incurring a $710 million negative manufacturing cost hit largely from tariffs in Q1, Caterpillar Inc. (NYSE:CAT) reduced its full-year tariff forecast to approximately $2.2 billion (down from $2.2-$2.6 billion) and won $392 million in tariff recoveries under the International Emergency Economic Powers Act (IEEPA). Cash generation was also strong, with operating cash flow of $4.4 billion. Management increased full-year revenue expectations to mid- to high-teens percentage growth (up from low-double-digits), while returning $2.2 billion to shareholders in Q2 alone, including $1.5 billion in share buybacks and $0.7 billion in cash dividends. In the same vein, Cummins Inc. (NYSE:CMI) told a very similar story of power-driven demand. The company reported record revenue of $9.5 billion, GAAP net income of $932 million, an EBITDA margin of 17.5%, and diluted earnings per share of $6.73. Synchronized demand from North American on-highway transport, Chinese construction activity, and high-performance generator sets for commercial data centers all helped operations. Cummins Inc. (NYSE:CMI) increased its full-year revenue guide for 2026 to 10-13% growth (up from 8-11%) and its full-year EBITDA margin forecast to 18.0-18.5% (up from 17.75-18.5%). The company also maintained a disciplined capital deployment strategy, returning $501 million to shareholders in the quarter through dividends and buybacks. Both companies are vulnerable to threats that might undermine the bullish narrative. Caterpillar Inc. (NYSE:CAT)'s results are largely related to North American construction and power-generation demand, both of which are cyclical, and the roughly $2.2 billion in estimated full-year tariff expenses, even after recent relief, is a significant drag that might re-escalate if trade policy swings again. Cummins Inc. (NYSE:CMI), on the other hand, has more diverse end markets, but this also implies more moving elements that may disappoint, including Chinese construction activity. Both companies also compete for a data-center power buildout that, while currently solid, is dependent on sustained hyperscaler capital spending. Any slowdown in AI infrastructure investment would directly impact the power-generation segment that both companies rely on for growth. Valuation trends show a wide pricing gap between the two industrial giants. Caterpillar Inc. (NYSE:CAT) is trading at a forward P/E multiple of 26.07x, the higher of the two, indicating optimism in the market for Caterpillar’s $4.4 billion in quarterly operating cash flow, expanding power-generation mix, and North American construction durability. Hedge fund support remains strong, with Insider Monkey’s Q1 2026 database showing that 87 funds owned stakes in Caterpillar Inc. (NYSE:CAT) at the end of the quarter. This compares to Cummins Inc. (NYSE:CMI), which trades at a relatively moderate forward P/E of 18.50x. According to Insider Monkey’s 13F data, hedge funds holdings increased from 67 funds in Q4 2025 to 79 funds in Q1 2026, indicating institutional interest in Cummins’ and power-generation exposure at a lower valuation. The valuation difference complicates the case for pursuing Caterpillar Inc. (NYSE:CAT) here. CAT investors are paying a premium for near-term momentum and lower tariff drag, leaving less room for error if construction demand slows or tariff relief turns out to be temporary. Cummins Inc. (NYSE:CMI) is a more appealing entry point on a relative basis, with double-digit revenue growth and improving margins, all at a lower multiple. Cummins Inc. (NYSE:CMI) may offer greater risk-adjusted value to investors wanting exposure to the power-generation theme, though Caterpillar Inc. (NYSE:CAT) appears to be better suited for existing holders than new capital until its valuation digests the recent surge. While we acknowledge the potential of CAT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years Disclosure: None. Follow Insider Monkey on Google News.

The fuel cell maker's earnings multiple is measured on a trailing year, while the guidance management has raised describes a far bigger business. That mismatch moves the buy decision onto delivery rather than demand. Bloom Energy (BE) has returned about 530% over the trailing twelve months and still trades roughly 31% below its 52-week high. At about $237 a share it changes hands at 278 times trailing earnings, against 23.8 for the S&P 500. Whether that gap is a warning or a lag depends on what the trailing figures measure. The Business Changed Faster Than The Trailing Window Bloom sells solid oxide fuel cell systems for on-site power generation. By its own account it took nearly a decade to become the standard supplier to hospitals, factories and university campuses, and less than a year to become one for AI data centers, where every major U.S. hyperscaler and more than a dozen neoclouds, AI labs, and colocation operators have validated its power solutions. Revenue over the trailing twelve months was $3.1 billion, up from $1.6 billion a year earlier, while the second quarter of 2026 alone brought $1.065 billion, up 166% year over year. A multiple measured across that window is priced against quarters that predate the ramp, which is why the raised full-year 2026 outlook matters more: revenue of $3.9 billion to $4.2 billion, and non-GAAP diluted earnings of $2.55 to $2.85 a share. Where The Twenty-Five Billion Actually Sits Most customers never buy the equipment outright. A financier purchases the energy servers and serves the end customer under the contract Bloom originated. Brookfield anchors that financing shelf: the partnership was formed last fall at $5 billion and expanded fivefold in June to $25 billion. That commitment is available project capital rather than an order book. What the trailing year shows is mixed: the business turns 23.7% of revenue into operating cash flow against 21.8% for the market, while its operating margin of 11.2% still trails the market's 18.4%. Holdings in the Trefis High Quality Portfolio tend to be businesses where growth, strong margins and cash generation already sit together. Lumpy Deliveries And A Withdrawn Cash Flow Guide The company flags the fragile part of its model: large campus deliveries are lumpy, and revenue can look concentrated in one or two customers in any single quarter, a concentration management attributes to delivery timing rather than backlog composition. Alongside the raised revenue and operating income outlooks, free cash flow guidance is no longer part of the presentation, a change the CFO described as aligning it with what the company truly guides, while saying conversion from operating income into cash remains strong. Separately, a securities class action covering stock purchases from February 2025 through July 2026 alleges false or misleading statements by the company and certain of its top executives. And when markets have broken this stock has fallen harder: down 78% in the 2020 pandemic crash against 34% for the S&P 500. The options market prices implied volatility at 98, the 15th percentile of its own trailing one-year range: high by most standards, low by this stock's own. At 278 times trailing earnings the price already pays for deliveries landing on schedule and the cash arriving behind them, making this a delivery question rather than a demand one. A slipped campus quarter with no conversion is where the multiple turns from a lag into a warning, and the same five factors on every stock are where both would show. Buy It Or Fear It, How Much Of It Should You Own? Whichever way the call lands, the bigger question is how much of any single stock belongs in a portfolio at all. A position that has grown large enough to matter is worth sizing deliberately rather than by accident. What a position that size would do to your net worth is exactly what the Trefis Wealth team computes, with the same rules-based systematic discipline that runs our High Quality Portfolio. Request a free vulnerability audit of your biggest positions.

Cummins’ second quarter was marked by robust top-line growth, but profitability faced headwinds, leading to a negative market reaction. Management highlighted surging power generation demand—especially from data centers—as a significant driver, with CEO Jennifer Rumsey emphasizing expanded capacity and a major agreement with a global hyperscaler. At the same time, higher variable compensation and tariffs weighed on margins. CFO Mark Smith noted, “The increase in EBITDA was primarily due to higher volumes, increased joint venture earnings and positive pricing, partially offset by tariffs and higher variable compensation expenses associated with our projections for record full year earnings.” Is now the time to buy CMI? Find out in our full research report (it’s free). Revenue: $9.46 billion vs analyst estimates of $9.31 billion (9.4% year-on-year growth, 1.6% beat) Adjusted EPS: $6.73 vs analyst expectations of $7.18 (6.3% miss) Adjusted EBITDA: $1.65 billion vs analyst estimates of $1.70 billion (17.5% margin, 2.6% miss) Operating Margin: 13.5%, in line with the same quarter last year Market Capitalization: $87.39 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jamie Cook (Truist Securities) asked about the impact of the EPA 2027 phased transition on 2027 demand and distribution margins. CEO Jennifer Rumsey explained the staggered rollout would smooth demand year-over-year, while CFO Mark Smith clarified that higher incentive compensation disproportionately affected distribution margins this quarter. Stephen Volkmann (Jefferies) inquired about the reset of incentive compensation and the wide power generation growth target range. Smith estimated next year’s incentive compensation could drop by $200 million and noted that the range reflected capacity limits and variability in smaller generator set sales. Jerry Revich (Wells Fargo) questioned whether high growth rates in Power Systems could be sustained and how the engine platform transition might affect operations. Rumsey emphasized that new capacity investments would phase in through 2028, with flexibility across applications, while the phased engine launch would enable a smoother operational ramp. Steven Fisher (UBS) asked about incremental margins in power and the likelihood of a prebuy ahead of new emissions standards. Smith attributed margin improvements to strong China demand and efficiency, while Rumsey indicated that the phased transition would lessen the need for disruptive prebuy activity. Angel Castillo Malpica (Morgan Stanley) probed financial implications of the phased engine launch and market share impacts. Smith said the company expects to recover nonconforming penalty costs through pricing, while R&D expenses will stay elevated but manageable during the transition. In the coming quarters, the StockStory team will be monitoring (1) the pace at which Cummins brings new production capacity online to alleviate generator set backlogs, (2) the execution of its phased launch of EPA 2027-compliant engines and customer adoption patterns, and (3) the sustainability of robust demand in both North American and Chinese data center markets. Regulatory developments and progress in aftermarket sales will also be closely tracked as indicators of ongoing performance. Cummins currently trades at $637.50, down from $648.85 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 11 a.m. ET Executive Director of Investor Relations - Nicholas Arens Chair and Chief Executive Officer - Jennifer Rumsey Executive Vice President and Chief Financial Officer - Mark Smith Operator: Greetings, and welcome to the Second Quarter 2026 Cummins Inc. Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Nick Arens, Executive Director of Investor Relations. Please go ahead. Nicholas Arens: Thank you, Paul. Good morning, everyone, and welcome to our teleconference today to discuss Cummins results for the second quarter of 2026. Participating with me today are Jennifer Rumsey, our Chair and Chief Executive Officer; and Mark Smith, our Chief Financial Officer. We will all be available to answer questions at the end of the teleconference. Before we start, please note that some of the information that you will hear or be given today will consist of forward-looking statements within the meaning of the Securities and Exchange Act of 1934. Such statements express our forecasts, expectations, hopes, beliefs and intentions on strategies regarding the future. Our actual future results could differ materially from those projected in such forward-looking statements because of the several risks and uncertainties. More information regarding such risks and uncertainties is available in the forward-looking disclosure statement in the slide deck and our filings with the Securities and Exchange Commission, particularly the Risk Factors section of our most recently filed annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. During this call, we will be discussing certain non-GAAP financial measures, and we will refer you to our website for the reconciliation of those measures to GAAP financial measures. Our press release with a copy of the financial statements and a copy of today's webcast presentation are available on our website within the Investor Relations section at cummins.com. With that out of the way, I will turn you over to our Chair and CEO, Jennifer Rumsey, to kick us off. Jennifer Rumsey: Thank you, Nick. Good morning. I'll start with a summary of our second quarter accomplishments and financial results, then discuss our sales and end market trends by region. I will finish with a discussion of our outlook for 2026. Mark will then walk you through additional details on our second quarter performance and our full year forecast. Before getting into the details of our performance, I want to highlight a few major events from the quarter. In May, we hosted our 2026 Analyst Day, where we raised our 2030 financial targets and reinforced our commitment to returning capital to shareholders. This reflects that our strategy is working. We are advancing our position in key markets and experiencing increasing demand for our products. In response to growing global investments in data centers, we also announced plans to further expand our global capacity and broaden our power generation portfolio with integrated power solutions and the development of 130-liter natural gas genset, extending our reach into the growing prime power market. Since Analyst Day, we have continued to build momentum in the data center market. We recently signed a multiyear agreement with a global hyperscaler, expanding a long-standing partnership and securing visibility into several gigawatts of future backup power genset demand. This agreement reinforces our confidence in our growth outlook and supports the capacity expansion already underway. In June, we announced an agreement with [ Circe ] Energy to provide QSK60 and HSK78 natural gas generator sets and integrated microgrid technology for a behind-the-meter prime power solution supporting a high-performance computing data center in Texas. The project highlights our ability to deliver integrated power solutions, deepen customer partnerships and expand our presence in the growing prime power market. Finally, the EPA released its much-awaited proposed rule last month that provides greater clarity on the implementation of the North America On-Highway 2027 emissions regulations for our industry. Based on the proposed rule, we announced our intention to use the implementation flexibilities outlined by the EPA to support a measured transition to our new helm engine platforms. This approach is designed to satisfy the proposed regulatory framework and support OEM customer production schedules while providing additional real-world operating experience to help build end user confidence in our new engines. This balanced approach also helps maintain product availability, continue bringing new innovative products to market and support a successful industry transition. As a part of our phased transition, we plan to begin limited production of the model year 2027 X15 engine in January 2027 based on individual OEM launch plans. With production ramping progressively and full production expected to begin in the fourth quarter of 2027. We also plan to begin limited production of the model year 2027 X10 in January 2027, with full production expected by the third quarter of 2027 based on OEM launch plans. During the transition, the current X12 and L9 engines used in truck and transit bus applications are expected to remain available under EPA's proposed rule. Consistent with our previous announcement, our next-generation B platform is expected to launch in January 2028, and the current B platform will be available for all of 2027. As we execute this phased transition, we will continue to work closely with our OEM partners, dealers, fleets and other end customers to align product availability and launch timing. We will also continue to stay actively engaged with the EPA and monitor its rule-making and implementation flexibilities to support a successful transition for our customers in the industry. Together, these actions reflect our commitment to deliver for our customers, execute with discipline and invest in products and technologies that will support long-term profitable growth. Now I will turn to our overall company performance for the second quarter of 2026 and cover some of our key markets. We delivered record second quarter sales of $9.5 billion, an increase of 9% compared to the second quarter of 2025. Growth was driven primarily by higher global demand in power generation markets, particularly from data centers and international construction markets. EBITDA for the quarter was a record $1.7 billion or 17.5% of sales compared to $1.6 billion or 18.4% of sales a year ago. The increase in EBITDA was primarily due to higher volumes, increased joint venture earnings and positive pricing, partially offset by tariffs and higher variable compensation expenses associated with our projections for record full year earnings. Our second quarter revenues in North America increased 8% compared to the second quarter of 2025. Industry production of heavy-duty trucks in the second quarter was 60,000 units, down 4% from 2025 levels, while our heavy-duty unit sales were 23,000, up 2% year-over-year. Industry production of medium-duty trucks was 32,000 units in the second quarter of 2026, an increase of 8% from 2025 levels, while our unit sales were up 29,000, up 19% year-over-year. We shipped 33,000 engines to Stellantis for use in their ramp pickups in the second quarter of 2026, down 2% from a year ago. Revenues for North America power generation increased by 19%, driven primarily by continued strong data center demand and supported by the additional manufacturing capacity we brought online at the end of 2025 to meet that growing customer demand. Our international revenues increased 12% during the second quarter compared to a year ago. Second quarter revenues in China, including joint ventures, were $2.3 billion, an increase of 30% year-over-year, driven by accelerating data center demand as well as improving on-highway and construction markets. Industry demand for medium- and heavy-duty trucks in China was 378,000 units, an increase of 24% from last year, driven by strong export demand, particularly in Africa and Southeast Asia as well as improving domestic replacement demand and increase in battery electric-powered trucks. Our sales in units, including joint ventures, were 53,000 units, an increase of 2%. Industry demand for excavators in China in the second quarter was 79,000 units, an increase of 34% from 2025 levels. We sold 15,000 units, up 35%, driven by export demand associated with mining investments in Africa and Indonesia. Results also benefited from OEM inventory stocking to mitigate potential logistics risks in the Middle East as well as continued domestic demand supported by rural development projects. Sales of power generation equipment in China increased 88% in the second quarter due to accelerating data center demand. Second quarter revenues in India, including joint ventures, was $742 million, an increase of 6% from a year ago. Industry truck production increased 5% from 2025, driven by increased freight availability, infrastructure and mining activity. Now let me provide our outlook for 2026, including comments on several of our key markets. We have raised our full year outlook once again as demand continues to build across several key markets. We now expect total company revenues to increase 10% to 13% in 2026 compared to our prior guidance of 8% to 11%. This improved outlook reflects higher demand in North America on-highway markets, continued strength in power generation driven by data center markets and improved on- and off-highway demand in China. We are raising the midpoint of our 2026 North America heavy-duty truck forecast to a range of 240,000 to 250,000 units, up from our prior guidance of 230,000 to 250,000 units. This reflects strong recent order activity and improving fleet profitability, which drove better-than-expected second quarter production and improved visibility into demand in the second half of the year. In the North America medium-duty truck market, we are increasing our forecast to 130,000 to 140,000 units in 2026 compared to our prior guidance of 125,000 to 135,000 units. This reflects stronger-than-expected demand in the second half of the year, supported by improving OEM outlooks and a modestly higher prebuy following the recent regulatory clarification. For both heavy and medium-duty trucks, we anticipate that the industry production is largely set for the second half of this year. Consistent with our prior guidance, our engine shipments for pickup trucks in North America are expected to be 125,000 to 140,000 units in 2026. In China, we now expect total revenue, including joint ventures, to increase approximately 15% in 2026, an improvement from our prior outlook of up 10%. The higher outlook reflects stronger-than-expected on- and off-highway demand, particularly during the second quarter. While we expect normal seasonal moderation during the second half of the year, we continue to expect full year demand to exceed our prior expectations. For China heavy and medium-duty truck demand, we now expect a range of down 5% to up 5% compared to our prior guidance of down 10% to flat. This reflects stronger-than-expected export demand, particularly in Africa and Southeast Asia. In India, consistent with our prior guidance, we expect total revenue, including joint ventures, to increase 2% in 2026. This includes our expectation for industry demand for trucks to be flat at the midpoint of our guidance, supported by tax rate reductions, improving underlying demand. For global construction, we now expect demand to range from flat to up 10%, an improvement from our prior outlook of down 10% to flat. In China construction, export demand is stronger than we previously anticipated with relatively flat domestic demand. In North America, we expect demand to remain largely flat given ongoing tariffs and interest rate uncertainty. We expect our major global high horsepower markets to remain strong in 2026. Consistent with our prior outlook, we continue to expect global power generation revenues to increase 15% to 25%, while customer demand remains exceptionally strong, particularly for data center applications, our growth in 2026 will continue to be constrained by capacity. Our outlook reflects the capacity we brought online in North America at the end of 2025, continued international growth, particularly in China and the broader Asia Pacific region and increased demand for lower output generator sets as customers seek solutions amid ongoing capacity constraints for larger configurations. The sustained strength in customer demand continues to support our long-term investments in expanding our power generation portfolio and global capacity as we discussed in May. In mining, we now expect engine sales to range from down 5% to up 5% for the year compared with our prior guidance of flat to up 10%. While fleet replacement activity remains supportive in several markets, elevated inventory levels and others are expected to moderate demand through the remainder of the year. For aftermarket, reflecting the slight adjustment in our prior guidance, we expect growth of 3% to 8% for 2026, supported by aging fleets and higher parts consumption. In summary, we delivered a strong second quarter and are raising our full year revenue growth outlook to 10% to 13% up while increasing the midpoint of our EBITDA guidance to a range of 18% to 18.5%. Our outlook reflects our expectation for improving operating performance in the second half of the year, led by stronger North America on-Highway markets and continued high demand in power generation. We enter the second half of the year with positive momentum and greater regulatory clarity, and we remain focused on executing our strategy, investing for long-term growth and helping our customers succeed in a rapidly evolving market. I want to thank our employees and leaders around the world for their commitment to our customers and each other. Their dedication, teamwork and focus on execution continues to differentiate Cummins and position us to deliver for our customers while creating long-term value for our shareholders. Now let me turn it over to Mark. Mark Smith: Thank you, Jen, and good morning, everyone. Our second quarter financial performance and other important business developments built on the themes from our recent Analyst Day. We delivered record quarterly sales and EBITDA dollars and strong operating cash flow in the second quarter, extending our track record of raising performance cycle over cycle. We returned over $0.5 billion of cash to shareholders in the form of share repurchases and cash dividends. The Power Systems business was awarded new prime power business here in the U.S., and we significantly expanded our opportunities for growth in data center backup power with one of our existing global hyperscaler customers, as Jen summarized. Having reflected on our strong performance in Q2 and the record demand for Cummins products globally, we've raised our full year forecast from 3 months ago. In another sign of confidence, our Board of Directors approved a 10% increase in our quarterly cash dividend, the 17th straight year of dividend growth. Second quarter revenues were $9.5 billion, up 9% from a year ago. Sales in North America increased 8%, while international revenues grew 12%, led by China. EBITDA was $1.7 billion or 17.5% compared to $1.6 billion or 18.4% a year ago. The increase in EBITDA dollars was primarily driven by higher global power generation volumes and stronger international construction demand. The net impact of tariffs was immaterial to EBITDA dollars in the quarter. Now let's go into each line item with a little more detail. Gross margin for the quarter was $2.5 billion or 26.1% of sales, up from $2.3 billion or 26.4% last year. The increase in dollars was primarily driven by higher volumes, an increase in joint venture earnings and positive pricing, partially offset by tariffs and an increase in higher incentive compensation, which is related to our projections for record full year financial performance this year. To avoid me repeating myself several times, I will simply note that the higher incentive compensation impacts cost of sales and operating expenses for all of our operating segments. The run rate for incentive compensation should be lower for the second half of the year than we incurred in the second quarter based on our current forecast. Selling, administrative and research expenses were $1.3 billion or 13.5% of sales compared to $1.1 billion or 13.1% a year ago. The increase was driven primarily by higher development costs to support our upcoming on-highway platform launches in North America and new mining and natural gas power generation programs. Joint venture income of [indiscernible] $154 million increased $36 million from the prior year, primarily due to stronger performance in our China joint ventures, benefiting the Engine and Power Systems segments. Other income was $32 million compared to $49 million from the prior year. Interest expense was $80 million, a decrease of $7 million from a year ago. The all-in effective tax rate in the second quarter was 25.1%, which included $29 million of unfavorable discrete items or $0.21 per diluted share. All-in net earnings for the quarter were $932 million or $6.73 per diluted share compared to $890 million or $6.43 per diluted share a year ago. Our operating cash flow was $1.5 billion, a record for a second quarter, and compares favorably to $785 million a year ago, driven primarily by improved working capital. During the quarter, we returned $501 million to shareholders, consistent with our long-standing commitment to return approximately 50% of operating cash flow. This included $225 million of share repurchases and $276 million in cash dividends. I'll now comment on the segment performance and our guidance for the full year '26. For the Engine segment, second quarter revenues were $3.1 billion, an increase of 6% from a year ago. EBITDA was 12.5%, a decrease from 13.8% a year ago as higher research and development and freight costs were partially offset by stronger North American medium-duty truck volumes, China construction demand and improved tariff recovery. In 2026, we project revenues for the Engine business to be up 9% to 14%, up from our prior guide of 7% to 12%, driven primarily by higher expectations for North America heavy and medium-duty truck. We expect EBITDA to be in the range of 12.5% to 13.25% compared to our prior guidance of 12.5% to 13.5%. Components segment revenue was $2.9 billion, an increase of 7% from a year ago. EBITDA was 13.2%, a decrease from 14.7% a year ago as higher product coverage costs were partially offset by stronger North American truck volumes and higher China on- and off-highway volumes and favorable pricing. For Components, we expect 2026 revenues to be up 8% to 13%, up from our prior outlook of growth of 7.5% at the midpoint due to stronger demand for trucks in North America and stronger demand in on- and off-highway markets in China. We expect EBITDA to be in the range of 13.5% to 14.25% compared to our prior guide of 13.5% to 14.5%. In the Distribution segment, revenues increased 9% from a year ago to a record $3.3 billion, EBITDA decreased as a percent of sales to 13.6% compared to 14.6% a year ago, driven by the higher incentive compensation and freight expenses, which were partially offset by higher power generation volumes. We expect 2026 distribution revenues to be up 9% to 14%, consistent with our prior guide. We also expect EBITDA margins to be in the range of 13.5% to 14.25% compared to our previous guidance of 14.25% at the midpoint. In the Power Systems segment, revenues were a record $2.3 billion, an increase of 19% and EBITDA increased from 22.8% to 24.5% of sales, primarily driven by strong global power generation demand, especially in the U.S. and China. For 2026, we expect Power Systems revenues to grow 14% to 19%, unchanged from 3 months ago. We also expect EBITDA margins in the range of 25% to 25.75% compared to our previous guide of 25.5% at the midpoint, reflecting continued strong performance across the business as well as increased investments during the second half of the year to support development of our new 130-liter natural gas generator platform and expand our position in the growing prime power market. Accelera revenues increased 38% to $145 million, driven by higher electrified powertrain and electrolyzer sales. EBITDA was a loss of $69 million, an improvement from a loss of $100 million in the prior year, reflecting targeted cost reduction actions previously implemented in this segment. In 2026, we now anticipate Accelera revenues to be in the range of $350 million to $400 million, an increase from our prior guide of $300 million to $350 million, and we now expect net losses in the range of $260 million to $290 million compared to our prior guide of a negative $270 million to $300 million. In summary, we've raised our full year outlook and now expect total company revenues to increase between 10% and 13% with EBITDA in the range of 18% to 18.5%. Our effective tax rate is expected to be approximately 23% for the full year, excluding any discrete items. Capital investments will be in the range of $1.35 billion to $1.45 billion as we continue to make critical investments to support future growth. In summary, we delivered a strong quarter supported by continued growth in demand for power generation equipment, improving North America truck markets and growth in China in most end markets, especially data centers. Thanks to the excellence and commitment of our employees in what remains a complex global economic environment, we entered the second half of the year with positive momentum and focused on supporting our customers with their growth plans and further improving our already strong financial position. Our strong balance sheet provides the financial flexibility to invest in the growth opportunities ahead, of which you've heard a little more today, while continuing to allocate capital with discipline and return excess capital to shareholders. Thank you. Now let me turn it back over to Nick. Nicholas Arens: Thank you, Mark. Out of consideration to others on the call, I would ask that you limit yourself to one question and a related follow-up. If you have an additional question, please rejoin the queue. Operator, we are ready for our first question. Operator: [Operator Instructions] Our first question is from Jamie Cook with Truist Securities. Jamie Cook: I guess 2 questions. One, just given the incremental clarity we have now on EPA 2027, how are you thinking about the setup for 2027? I know at the Analyst Day, you expected a down first half for 2027. So how you're thinking about that? And then I guess, Mark, how -- if you look at your earnings in the back half of the year, it implies earnings probably $16, $17 of earnings power in the back half of the year. I'm trying to think, is that a good way to think about a base I mean for 2027? And then my second question, just the distribution margins. I think you lowered quite a bit. So if you could just talk around the change in margin guidance for distribution. Jennifer Rumsey: Amy, obviously, we raised our guide for the year and the outlook for the North American truck market. So we continue to expect strength in the second half of the year. With the EPA draft rule and with the phased transition that we've announced, the key thing is the destination doesn't change the growth opportunity that will exist for us in engines and components. with those new platform launches remains the same, and we think the transition will be smoother. So while we would expect some moderation in demand next year, and we won't give specific guidance, of course, today on what that is, it will not be as abrupt as we might have previously anticipated as we continue to offer the current product for part of next year or in the case of the [ B ] for all of next year and then ramp up the new product. So it's going to smooth that overall transition and really, I think, make less variation of what year-to-year demand looks like, more driven just by the fundamental economics. Mark Smith: Yes. And then to your other questions, Jamie, yes, there's nothing -- there's no onetime or anything nonroutine in the second half of the year. So we're expecting strong EBITDA percent for the second half of the year, up from the first half of the year, up from a year ago in both Q3 and Q4. The top-up in outlook for incentive compensation, yes, created a little bit of noise in the second quarter results, but that's going to be lower going into the second half. But the underlying story is one of, yes, significant revenue growth and margin expansion on an underlying and as you'll see, hopefully, on a reported basis in the second half of the year. And then distribution, there's really 2 things going on and maybe one thing not going on and one thing going on in that the mix of the business isn't really changing. There's obviously a lot of momentum in their execution of the installation of a lot of these big power generation contracts the parts business isn't growing at the same rate, probably that would be the thing that would need to see to see a significant step-up in the margin percent probably. The other factor is, as we've increased our outlook for total company profitability, along with that goes the higher incentive compensation, which unfortunately, the distribution disproportionately impacts them as they've got -- it's more of a people business. So that's just a natural consequence. I would -- as a starting point, I would say when we go into next year, we reset our plans at target. Our incentive plan is operating above target right now for the current year because of the record performance, and that gets reset going into next year. So that would be one thing that will probably be a bit of a tailwind. What happens to demand? Too early to say. As Jens said, our best guess would be less volatility than we might have imagined in certainly in the first half of the year, North American and Highway unquestionably, we've got robust backup in power generation, primarily from standby diesel for data centers, and you can hear that, that continues to grow. So not seeing any significant changes at this point in time, but it's a very early commentary on what we see going forward. So I hope that helped. There's nothing significantly changing. The distribution business, yes, could get close to kind of 10% earnings growth this year. And on an underlying basis, we see a lot of growth there and margin expansion going forward. Operator: Our next question is from Steve Volkmann with Jefferies. Stephen Volkmann: Mark, can I just take that one step further? What would roughly be the reset in the incentive comp, I guess, I don't know, in dollar terms, just so we can think about what that good guide might look like next year? Mark Smith: Well, next year, it could be in the order of like $200 million. Stephen Volkmann: Perfect. Okay. And then... Mark Smith: Just to try and bring clarity because obviously, that's created a little bit of, I would say, distortion is the wrong word, but we had to top it up in the second quarter. For the second half, it'll be about $25 million a quarter lower in Q3 and Q4 than the Q2 expense. Stephen Volkmann: Got it. Okay. And then can I just ask on power gen? I'm interested that your target is up 15% to 25% because my interpretation is you're kind of capacity constrained there. Why such a big range for that target? What could really kind of move that from bottom to top of the range? Jennifer Rumsey: Yes. Thanks, Steve. So our guide obviously stayed the same this quarter to what we talked about last quarter. It's largely underpinned by increased capacity investment that we made in the 95-liter in particular, that we completed last year and then growing demand in China out of our businesses in China for product in China and Southeast Asia. And as I said in my remarks, because of the capacity constraints on the large gensets, we're seeing some customers taking some of the smaller gensets, but that trend is basically staying the same in the last 3 months as what we saw previously. So there is still some range in that, but it really depends on that. I think the large gensets will be basically at capacity and then how much we see of some of the smaller product sale will drive that variation. Mark Smith: But it's fair to say it's unlikely to be a 10% swing from here to there. I think the one thing that's been a positive surprise is really the rapid acceleration in China. We were already expecting strong demand in North America, but China has really picked up as well. So whatever extra we can squeeze out with our amazing supply chain team in Power Systems, probably we can sell it for this year and certainly into next year. Operator: Our next question is from Jerry Revich with Wells Fargo. Jerry Revich: I'm wondering if we could just talk about, given the performance ramp ahead of plan this year in Power Systems, how are you thinking about how much the team can ramp up deliveries '27 versus '26? Can we sustain this teens type of growth rate as the supply base continues to ramp up? Any updated thoughts on the cadence would be helpful. Jennifer Rumsey: Yes. At this point, the cadence we see is really the same as what Jenny talked about in the May Analyst Day, where we announced, of course, the additional investment in capacity, 20 gigawatt incremental capacity across basically all of our plants and our supply chain. And we'll see some of that coming online next year. So we'd expect some step-up and then the bigger step-up happening in '28. And then continuing to phase in through 2030. And then recall that, that capacity is pretty flexible across size of engine, size of genset, application between -- for engines between industrial markets and power gen markets, including the natural gas prime demand. But really, we're starting to see -- as you heard, we're starting to see some prime demand for the products that we have while we work on developing the new 130-liter, but that's going to grow a little bit. But still the predominant revenue for power gen this decade is going to be diesel standby. Jerry Revich: Super. And then can I shift topics in engines, the guidance implies 14% type margins in the fourth quarter. On prior engine transitions, you folks have executed pretty seamlessly from one product to the next. Can you just talk about expectations into '27? How hard is the product transition that you folks are dealing with producing some new products, some older product? How should we be thinking about the impact on operations over the course of '27? Jennifer Rumsey: Yes. I mean we -- of course, in our plants, we're used to producing different products, but this ability to have a longer limited production transition is something that we've not had in the past. So with the flexibility in the draft rule, and we anticipate this will stay in place based on all of our conversations with the EPA, it really helps us and the industry ramp through that limited production phase between the old and the new products. So we're going to continue to sell the current product next year and anticipate pretty solid demand for that and then ramp up. And then -- well, we've had the forever rising tour out. We've been doing field tests. We've had customers seeing the new helm platform launches. I spent time with customers last week, and they are really excited about the opportunity to start to buy at the beginning of the year and build confidence and move in a more measured way between the old and the new products. So I think it's going to be a positive for us, and it's going to let us really gain confidence and capability in that new product with -- across our different OEMs and end customers. Operator: Our next question is from Steven Fisher with UBS. Steven Fisher: Just on the power side of things, the incremental margins seem to be better than the 25% to 30% expectations that you've talked about. I'm just curious kind of what's surprising you there? And it looks like in the second half implied to be better than that as well. Any color there would be helpful. Mark Smith: I think the main driver has probably been stronger demand in China, which helps on the JV earnings side. But overall, not a big surprise. It's really just -- it's a question of efficiency during the ramp-up and how well we work with the supply chain, the pricing set. So I think generally, things have been going well there. There is going to be a step-up in engineering. It's not extraordinary. But as we launch -- we're bringing to market more new platforms, that will be a factor. But certainly, we expect the strong gross margin performance to continue. Steven Fisher: Okay. And then just as a follow-up to maybe one of the prior questions. In terms of this -- the engine transition in 2027, I'm curious to what extent you've thought maybe about whether there's likely to be a prebuy in 2027 as well for those that might be a little more concerned about the technology, but also still some higher cost. Do you think the sort of the phase ramp-up will help alleviate some of the desire potentially for a prebuy on the technology side? Or do you think we could still see a prebuy in '27 out of '28? Jennifer Rumsey: I think it really enables just an overall smoother transition. That -- the industry is coming off of cyclical low. The fundamentals are improving, I would describe it as cautious optimism. So we're -- the fleet is aging. We're starting to see customers just the fundamental economics are allowing them to buy, which is supporting demand and some prebuy is coming in, and I think we would anticipate that would continue into next year. But I would think of that as just generally smoother year-over-year versus what -- if we were to go back a year or 2 years ago, what we would have anticipated. Operator: Our next question is from Angel Castillo with Morgan Stanley. Angel Castillo Malpica: Just wanted to continue on the EPA27 dynamic. You mentioned that overall, the shape of the curve and the demand likely ends up being a little bit better for you. But just curious if we could put a little bit more of a financial kind of details around that just in terms of any implications on your pricing ability on the new engine as you roll that out or phase that in? Any implications on costs as we think about kind of this new more layered approach or slow ramp-up, what does that mean for margins versus what you had kind of anticipated before? And just lastly on that, like any implications on market share? I don't know if others can use credits or any other dynamics you'd expect? Mark Smith: Well, I think on economics, we're still working through all of the pricing. But what we said at Analyst Day for the new products, but what we said at Analyst Day is the industry expects that the largest contributor to the increased value and price of the trucks is going to be the powertrain. So we still believe that to be the case. And we expect when we're launching new products with new value that we're appropriately compensated for that. Regarding current products, obviously, going into next year, I'll be surprised I didn't get a question on this already, but there'll be NCPs or nonconforming penalties. Those we expect to pass on to the market. So we don't expect a significant financial impact from those. So yes, those are the things that I would say overall in terms of economics of what we know now. But I think this -- the benefit of this staged or staggered transition is obviously that we get to trial those products longer. And yes, it should be better for the industry overall. One of the consequences, of course, of staggering is that our R&D costs will stay elevated for a little bit longer. Again, it won't be hundreds of millions of dollars more than the current rate. We're already spending a bit more. But our product coverage costs for next year would be lower than we would have anticipated with the full launch on January 1. So quite a few moving parts, but I've tried to cover them all. Angel Castillo Malpica: No, I understood. That's very helpful. And then just curious on the backup or diesel power backlog. Just could you give us any color in terms of what you're seeing in the shape of your backlog, how much maybe it's growing sequentially or year-over-year in the quarter? And any kind of color that you can provide on kind of the regional demand as well as just the underlying backdrop that you see there for that product? Jennifer Rumsey: Yes. I mean, really, it continues to be a capacity constrained strong demand market. You heard the strength in U.S., China, Southeast Asia. It continues. I'd just say we had a summit recently with customers and leaders from across the Americas for power generation. And the message from them really remains consistent, which is continue to expand capacity, demand for backup power is ahead of industry supply availability and how much more can we deliver them. So backlog is very strong. We feel very confident in the capacity investments that we're in the midst of making and under pressure to go faster if we can. Operator: Our next question is from Kyle Menges with Citi. Kyle Menges: I just wanted to follow up on that last question from Angel. I'm curious for the 95-liter at this point, how far are you booking -- how far out are you booking orders? And also, one of your competitors said earlier today that lead times are extending for diesel gen sets. And I'm curious if you're seeing the same. Mark Smith: Well, I think demand continues to grow. That's the thing. And so we're now selling out into the second -- further out into the second half of 2020 overall as a general statement about demand. So we have seen absolutely no pausing or blinking in demand. You've heard about the announcements with one large customer, but I would say the general demand trend is not flatlining, it's still growing. And so yes, it's -- if you want a new one, it's going to be the second half of 2028. Kyle Menges: That's helpful. And then just any real changes in pricing as you're signing new agreements or pretty consistent with what pricing you've been putting through in agreements so far? Mark Smith: I think what you heard from Jenny is a clear expectation that as we grow, that we will be raising our margin performance over time. That comes from a combination of factors, effectively introducing production being fairly paid for the technology we're providing, hopefully, parts growth from the industrial applications, all of those will contribute. So we clearly have ambitions to keep growing the margins. We've got really strong momentum from the Power Systems team. That's what I would say overall. But again, I'd just remind you, there are not many players in this segment who can provide not just the products, but the service, the installation on a global basis. So demand is high. Operator: Our next question is from David Raso with Evercore ISI. David Raso: Two quick ones. For 2027, I'm just curious your thoughts on the North American truck market, the appetite for -- are you finding customers have more desire to buy the 200-milligram full penalty engine, so no tech change, but they're paying the penalty or a lower milligram that's still noncompliant, but then you can use credits to offset it, so there's no price increase. I'm just trying to get a sense of the appetite of the customer for new tech but at a lower price versus I'd rather just have the current tech and pay the penalty and not sweat the technology change. And the second question, can you help us with power gen next year, the level of capacity versus this year, just so we have a sense of volume. I know mix is an important part of that question, but just literally the capacity you think you'll have next year versus this year for power gen resets. Jennifer Rumsey: So the one -- I'll start and then let Mark build on that. David, thanks for the question. And just a little bit of a caution to say we expect that NCPs and that regulatory flexibility will stay in place in the final rule. We have a proposed rule and some of the details of how that will work will move around. So how you described what could happen in terms of product availability, credit offsets, all that may not exactly be correct. Fundamentally, though, what I would say is that customers are interested in both. They're very excited to be able to continue buying the current products that we are offering and extending into next year, and they want to start buying the new product and gain more experience with that. And we're working right now across our different OEMs on their plans and what will be available in different truck models at what time. So there will be multiple moving parts in how this plays out. But fundamentally, we are talking with OEMs about what they want from current product, new product, what they're selling to the market and the end customers that we talk to. I would anticipate initially, we'll buy more of the current offering, but they want both. They want to start ramping into the new product as well. Mark Smith: Essentially, I don't think most of the conversation on an individual base saying I want one of those or I want one of those, right? Ultimately, the industry is moving towards the new products. It's on an extended time frame in a fashion that we haven't seen before over recent cycles. So it is somewhat unprecedented, certainly over the last 15 years that for whatever the reasons, the regulations are being finalized so close to the actual date of implementation. But I don't think it's a per engine calculation that's really going on. Ultimately, we all -- the entire industry, not just Cummins needs to transition to the new products. So it will be an interesting dynamic along the way. David Raso: On the power gen capacity question? Mark Smith: I think we'll punt that one until later in the year. Otherwise, we're getting into too many levels of guidance right now. But yes, it will be higher. Operator: Our next question is from Tim Thein with Raymond James. Timothy Thein: Maybe I'll just pair these 2 together. So question one is just on the engine business. Curious if you can comment to the outlook for parts demand in North America, just again, the on-highway piece specifically. I think if I read it correctly, the guidance came up just marginally. But just curious if, in general, the healthier freight markets and stronger customers, if you're seeing any pull-through in parts? And then the second part is just on the China data center market has gotten a lot of airtime. And I'm just curious if you have just from a visibility standpoint, how that compares just -- you talked a lot about North America, but just do you have a similar level of kind of visibility or not in China and obviously, the implications for the Chongqing joint venture, which is growing and important. So maybe just those 2 questions. Jennifer Rumsey: Yes. On the parts, the market is up, as you said, we raised the bottom end of the guide a little bit. So we're seeing some strengthening of parts as the fleet has aged and economics are improving a little bit. It hasn't moved fundamentally from what we talked about a quarter ago, but better certainly this year than last year. And just as in North America, we have strategic customers in China and Southeast Asia, and we have conversations with them about multiyear plans and demand there. So I would say the conversations are very similar. We go sit down and they say more than the last time we met, please, how quick can you do it? Those are pretty consistent in both of those customer basis. Mark Smith: Core large customers in each market and a broader market participation with others. Operator: Our next question is from Rob Wertheimer with Melius Research. Robert Wertheimer: Mark, you touched on this earlier on the NCPs and the EPAs 2027. But just to understand it right, if a competitor has credits, they can avoid passing the cost of that on. And do you anticipate any difficulty in passing that through yourselves or any margin impact that might arise from that in next year? Jennifer Rumsey: Yes. Well, so how the credits will work in the end, it remains to be seen, but it's not -- generally, you can't just use credits to offset NCPs. I'd just kind of correct you on that and our expectation. there. Mark Smith: That's not specific to Cummins. Jennifer Rumsey: Yes. And of course, we're not -- we can't comment on what everybody plans to do in terms of NCPs and credit usage and all of that. But we don't expect that there's going to be a kind of a big use of credits to offset NCPs. Operator: Our next question is from Kristen Owen with Oppenheimer & Company. Kristen Owen: Two quick ones from me. First, I understand it's probably difficult to parse out underlying demand versus prebuy given the changes. But I do want to try to pull out the threads for underlying demand because it does seem like the economics are improving on tightening supply, not necessarily freight increase in volume. So I'm just wondering how you're thinking about underlying replacement demand outside of the EPA transition? And then I have a follow-up. Jennifer Rumsey: Yes. A lot of what we see right now is that underlying demand and replacement improving. So there is some prebuy happening certainly, but the fundamentals have improved, and that's driving underlying demand up. And the uncertainty that existed really until last month around regulations and all of the details that were associated with that has caused people to be cautious around prebuy as well. So we are seeing some in the second half, but I would say it's more driven by just market improvement. Kristen Owen: Okay. I'm just trying to square that with the increase in the prebuy expectation in your medium-duty guidance. So maybe I can follow up with that offline. My second question is, since we've covered NCPs pretty well, I wanted to ask about the warranty accruals. That was obviously favorable from a pricing standpoint for the buyer. But just how you're thinking about warranty accruals as we start to build this bridge in 2027, how that's going to impact your incremental margins with the more measured cadence of production. Mark Smith: Right. So typically, when we launch a new platform of which we'll be launching several between '27 and '28, those come with a higher warranty accrual, and then we adjust that over time as we get actual field experience. Our current warranty costs are running in the low 2% of sales range across the entire company, pretty much at historical lows despite what I call historical complexity of the products. So we'd expect that to go up as we get more of a mix of new products in North America. And then over time, historically, those costs either have not played out quite as high as anticipated or we've just addressed any field issues as we've gone along. That's just a typical part of launching new products. So I would say relative to what we might have thought 6 months ago, next year's warranty costs will be more like this year's for the first half of the year, maybe a slight tick up for the limited launches and then we'll move to a higher rate as we get more into the fuller launches. in fourth quarter and into 2028. We're just focusing on that. Of course, on the new products, we've got more value, more content. And there's also a scaling and efficiency factor to some extent on some of the components as we go through. But by and large, the first 9 months are going to look -- if we just assume equal demand, they're going to look more similar to how we're performing now. And then it will start to change for a short period of time and then improve again over time, that would be the goal. Jennifer Rumsey: The extended limit of production, though, will allow us to get on any issues that we see quickly and address those as volume starts to ramp. So over the long term, it should provide a positive from a quality perspective. Operator: Thank you. We have reached the end of our question-and-answer session. I would like to hand the floor back over to Nick Arens for any closing comments. Nicholas Arens: Thank you. That concludes our teleconference for today. Thank you all for participating and your continued interest in Cummins. As always, the Investor Relations team will be available for questions after the call. Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Cummins, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cummins wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $411,427!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,252!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 11, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Cummins. The Motley Fool has a disclosure policy. Cummins (CMI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. Cummins stock has delivered a very strong 5 year run, yet the current checks present a mixed message, with the intrinsic value estimate from a Discounted Cash Flow (DCF) model pointing to a roughly fair price while the broader valuation score sits on the weak side. Cummins has returned 202.3% over the past 5 years, which puts more focus on whether the current price still leaves a margin of safety for new capital. Recent revenue growth in key end markets and higher cash generation can support valuation, but any disappointment in future earnings quality or cash flow conversion may weigh on what investors are willing to pay. Cummins scores 2 out of 6 on the broader valuation checks, which suggests the stock does not screen as a clear bargain overall even though some metrics and the DCF view it more favourably, according to this valuation summary. For investors, the debate is whether Cummins at US$650.25 now reflects most of that 5 year success, or if the current valuation still leaves enough upside to justify the risk. Cummins delivered 73.1% returns over the last year. See how this stacks up to the rest of the Machinery industry. The Discounted Cash Flow (DCF) approach estimates what Cummins is worth today based on the cash it could return to shareholders over time. For Cummins, the latest twelve month free cash flow sits at about $3.4b, and the 2 Stage Free Cash Flow to Equity model assumes these cash flows continue growing rather than shrinking. On that basis, the DCF points to an intrinsic value of about $686 per share, compared with the current price around $650. This suggests the stock screens roughly 5.3% undervalued, indicating the model views the current price as close to fair rather than at a steep discount. Cummins’ recent record Q2 2026 revenue and improved free cash flow margin help explain why the cash flow outlook in the model remains constructive even though the market price is not far behind the intrinsic estimate. Overall, the Discounted Cash Flow view suggests Cummins appears close to fairly valued, with only a modest discount to its estimated intrinsic worth. Cummins is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act. Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Cummins. The P/E ratio suits Cummins because earnings are a core focus for many investors watching its engine and power markets. On this metric, Cummins trades at about 33.0x earnings, which is slightly above the machinery industry average of 27.8x and almost in line with the peer group around 32.9x. That already places the stock toward the upper end of the sector range. The fair P/E ratio for Cummins, which adjusts for its size, risk profile and profitability, is estimated at 40.0x. This sits above the current 33.0x level, so the stock screens at a discount on this tailored benchmark even though simple comparisons to the industry do not flag it as obviously cheap. Put alongside the DCF view that points to a price close to intrinsic value, the P/E work indicates the market may not be fully reflecting the earnings power implied by that framework. On the P/E multiple, Cummins stock appears undervalued compared with what the tailored fair ratio would imply. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for Cummins aim to close the gap between the mixed signals from the DCF and P/E work, and to outline what would need to happen next for the stock to be worth materially more or less than today’s price. Each narrative details the specific assumptions on Cummins' growth, margins and earnings that underpin its fair value, so you can compare those expectations with actual results over time on the Community page. One of the top community narratives on Cummins: 28% undervalued Read one of the top narratives on Cummins Do you think there's more to the story for Cummins? Head over to our Community to see what others are saying! For Cummins, the Discounted Cash Flow (DCF) work points to intrinsic value that sits only modestly above the current share price, so the stock does not screen as deeply mispriced. The tailored P/E view leans towards undervalued, yet the broader valuation checks remain weak, which tempers how much weight you might put on that single signal. The gap between the models largely comes down to how you view future cash flow durability versus the earnings multiple the market is willing to pay. The key question now is whether Cummins can sustain the earnings and cash flow quality needed to justify a higher market multiple from here. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CMI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Cummins Inc. reported past second-quarter 2026 results with sales of US$9,457 million and net income of US$932 million, as earnings per share from continuing operations increased modestly year on year. The company paired these record quarterly sales with a higher full-year 2026 revenue growth outlook and a quarterly dividend increase to US$2.20 per share, underscoring confidence in demand from data centers and on-highway markets. Next, we’ll examine how Cummins’ raised 2026 revenue guidance and data center power demand reshape its existing investment narrative. The latest GPUs need a type of rare earth metal called Neodymium and there are only 28 companies in the world exploring or producing it. Find the list for free. Cummins’ story still hinges on whether you believe its pivot toward data center and diversified power solutions can balance a choppy truck cycle and persistent Accelera losses. The latest quarter strengthens the near term catalyst of data center power demand and a fuller Power Systems backlog, but also highlights the key risk that higher costs and continued alternative powertrain losses could cap earnings even as revenues rise. Overall, the earnings miss looks more cosmetic than thesis changing. Among recent announcements, the raised 2026 revenue guidance to 10% to 13% stands out as most relevant here. It directly ties Cummins’ record Q2 sales to stronger demand in North America on highway, China construction and power generation, reinforcing the view that data center and power projects are increasingly important swing factors. For investors watching catalysts, that guidance upgrade sits alongside the hyperscaler and Circe Energy deals as concrete evidence of growing power exposure. Yet while the headline growth looks encouraging, investors should be aware that... Read the full narrative on Cummins (it's free!) Cummins' narrative projects $44.2 billion revenue and $5.3 billion earnings by 2029. This requires 9.3% yearly revenue growth and a $2.6 billion earnings increase from $2.7 billion today. Uncover how Cummins' forecasts yield a $748.81 fair value, a 15% upside to its current price. Before this report, the most optimistic analysts were modeling roughly US$49.7 billion of revenue and US$6.2 billion of earnings by 2029, so this stronger data center driven momentum could either support that bullish path or highlight how exposed those forecasts are if Accelera restructuring or truck softness bite harder than expected, reminding you that reasonable views on Cummins’ risk reward can differ widely. Explore 4 other fair value estimates on Cummins - why the stock might be worth just $686.42! Don't just follow the ticker - dig into the data and build a conviction that's truly your own. A great starting point for your Cummins research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. Our free Cummins research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Cummins' overall financial health at a glance. Our top stock finds are flying under the radar-for now. Get in early: The future of work is here. Discover the 35 top robotics and automation stocks leading the charge in AI-driven automation and industrial transformation. Capitalize on the AI infrastructure supercycle with our selection of the 56 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow. Invest in the nuclear renaissance through our list of 89 elite nuclear energy infrastructure plays powering the global AI revolution. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include CMI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Cummins Inc. CMI reported second-quarter 2026 adjusted earnings of $6.94 per share, which missed the Zacks Consensus Estimate of $7.33 by 5.3%. Higher incentive compensation, research and development spending, freight costs and product coverage expenses put pressure on profitability. Revenues increased 9.4% year over year to $9.46 billion and topped the consensus mark of $9.33 billion by 1.38%. Growth was led by global power generation demand, international construction markets and improving North American truck activity. Cummins currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote Engine segment sales increased 6% year over year to $3.08 billion. Total engine shipments rose 9.7% to 161,200 units. North American revenues rose 1%, while international sales jumped 23%, primarily on stronger construction demand in China. Segment EBITDA declined to $386 million from $400 million, while margin contracted to 12.5% from 13.8%. Higher research and development and freight costs outweighed benefits from stronger North American medium-duty truck volumes, China construction demand and improved tariff recovery. Components segment sales advanced 7% to $2.89 billion. Revenues increased 6% in North America and 8% internationally, reflecting stronger truck demand in the United States and China. Segment EBITDA decreased to $381 million from $397 million, with margin falling to 13.2% from 14.7%. Higher product coverage costs were partly offset by favorable pricing, stronger North American truck volumes and increased China on- and off-highway activity. Distribution segment sales rose 9% to a record $3.33 billion. North American revenues climbed 13%, while international revenues increased 1%, driven by demand for power generation products, particularly for data center applications. Segment EBITDA increased slightly to $451 million from $445 million, but margin declined to 13.6% from 14.6%. Higher incentive compensation and freight expenses more than offset increased power generation volumes. Slower parts growth relative to power generation also limited margin expansion. Power Systems sales surged 19% to a record $2.26 billion. Revenues increased 19% in both North America and international markets, supported by data center power demand in the United States, China and Asia Pacific. Segment EBITDA climbed to $552 million from $430 million, while margin expanded to 24.5% from 22.8%. Strong global power generation volumes were the primary driver. Higher China joint venture earnings, favorable production efficiency and pricing boosted results. Power generation sales jumped to $1.54 billion from $1.21 billion, while industrial sales increased to $538 million. Accelera segment sales increased 38% to $145 million, driven by higher electrified powertrain and electrolyzer sales. The segment posted a negative EBITDA loss of $69 million, narrowing from a loss of $100 million a year earlier. The improvement reflected targeted cost-reduction actions previously implemented as Cummins focused zero-emissions investments on its most promising opportunities. Cummins generated record second-quarter operating cash flow of $1.5 billion, up from $785 million. Capital expenditures increased to $249 million from $231 million. Cash, cash equivalents and marketable securities totaled $3.92 billion at quarter-end, compared with $3.61 billion at the end of 2025. Long-term debt declined to $6.74 billion from $6.79 billion. The company returned $501 million through $276 million in dividends and $225 million in share repurchases. Cummins also increased its quarterly dividend to $2.20 per share from $2.00, marking its 17th consecutive annual dividend increase. Cummins now expects full-year 2026 revenues to increase 10-13%, up from its prior projection of 8-11%. The revision reflects stronger demand in North American on-highway markets, China construction and power generation. Management expects the second half of 2026 to be stronger than the first half. The company raised the low end of its EBITDA margin outlook to 18%, resulting in a new range of 18.0-18.5%, excluding first-quarter fuel cell business sale charges. General Motors GM reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected to be $12-$14 per share, up from the prior range of $11.50-$13.50. Tesla, Inc. TSLA reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. Ford F reported second-quarter 2026 adjusted earnings of 42 cents per share, beating the Zacks Consensus Estimate of 33 cents by 27.27%. Earnings rose 13.5% from 37 cents a year ago. Automotive revenues of $44.89 billion fell 4.4% year over year and missed the consensus mark of $45.72 billion by 1.81%. Ford’s consolidated second-quarter revenues came in at $48.3 billion, down 3.7% year over year. The company has raised its full-year adjusted EBIT outlook to $10-$11 billion from $8.5-$10.5 billion. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cummins Inc. (CMI) : Free Stock Analysis Report Ford Motor Company (F) : Free Stock Analysis Report General Motors Company (GM) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Cummins Inc. CMI emphasized rising data center power demand, improving truck markets and a measured 2027 emissions transition on its second-quarter 2026 earnings call. Management raised its full-year revenue and EBITDA outlook. Quarterly revenues of $9.46 billion topped the Zacks Consensus Estimate of $9.33 billion, while earnings of $6.94 per share missed the consensus mark of $7.33. The call centered on second-half execution and capacity-led growth. Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote Chair and CEO Jennifer Rumsey raised 2026 revenue growth guidance to 10-13% from 8-11%. Cummins also lifted EBITDA guidance to 18-18.5% from 17.75-18.5%. Rumsey tied the revision to stronger North American on-highway demand, China construction activity and sustained power generation orders. Cummins also increased heavy and medium-duty truck market forecasts. CFO Mark Smith said that the second half should deliver stronger EBITDA percentages than the first half and the year-ago period. He added that no unusual benefit supports the implied improvement. Rumsey maintained the forecast for global power generation revenue growth of 15-25%, with large generator sets operating near capacity. She highlighted a multiyear agreement with a global hyperscaler covering several gigawatts of future backup-power demand. Cummins also secured natural gas generator and microgrid work for a Texas high-performance computing project. During Q&A, a Citigroup analyst asked about lead times. Mark Smith said that new demand for the 95-liter platform extends into the second half of 2028, while broader orders continue to grow. Rumsey outlined limited production of the 2027 X15 and X10 engines beginning in January 2027. Full production is planned for the fourth and third quarters of 2027, respectively. A Truist Securities analyst pressed management on the 2027 setup. Rumsey said that the proposed EPA flexibility should reduce the abruptness of the transition by keeping selected current engines available while new platforms ramp. Smith said that Cummins expects to pass nonconforming penalties through to the market. He also noted that research spending will remain elevated longer, while product coverage costs should be lower than under a full January launch. Second-quarter EBITDA margin was 17.5%, down from 18.4% a year earlier, even as EBITDA dollars reached a record. Higher incentive compensation, freight and development spending weighed on several segments. Smith said that incentive compensation expense should run about $25 million lower per quarter in the third and fourth quarters than in the second quarter. He also identified an incentive-compensation reset of roughly $200 million entering 2027. Power Systems EBITDA margin increased to 24.5% from 22.8%. Smith cited stronger China demand, joint venture income, production efficiency, supply-chain execution and pricing as contributors. Rumsey said that North American revenues rose 8%, while international revenue increased 12%. China revenue, including joint ventures, climbed 30% to $2.3 billion. Cummins raised its China revenue outlook to about 15% growth and improved its global construction forecast to flat to up 10%. However, it reduced the mining outlook to down 5% to up 5% because of elevated inventory. Smith reported record second-quarter operating cash flow of $1.5 billion. Cummins returned $501 million through dividends and repurchases, consistent with its goal of returning about half of operating cash flow. Rumsey’s message combined confidence in demand with discipline around capacity, product launches and customer transitions. Power generation expansion and the phased engine rollout remain the central operating priorities. Smith emphasized stronger second-half profitability without relying on one-time support. Management remains focused on backlog conversion, launch costs and capacity funding beyond 2026. CMI carries a Zacks Rank #3 (Hold), with a Value Score of B, a Growth Score of B, a Momentum Score of A and a VGM Score of A. The grades indicate favorable style characteristics, led by momentum and the combined VGM measure. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Hold rank tempers those favorable scores because Style Scores are designed to complement the Zacks Rank, with the strongest combinations centered on Rank #1 or #2 stocks. The Zacks Rank can change as earnings estimates are revised after the just-reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Cummins Inc. (CMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in Cummins Inc.? Here are five stocks we like better. Cummins reported record Q2 2026 results, with revenue up 9% to $9.5 billion and EBITDA reaching $1.7 billion. The company raised its full-year revenue-growth outlook to 10%–13% and increased the midpoint of its EBITDA-margin forecast to 18.25%. Data-center demand was a major growth driver: Power Systems revenue rose 19% to $2.3 billion, supported by strong backup-power demand in the U.S., China and Southeast Asia. A multiyear hyperscaler agreement provides visibility into several gigawatts of future generator demand, though capacity constraints may limit near-term growth. Cummins improved its outlook for North American truck production and China, citing stronger orders, fleet profitability and construction activity. Record operating cash flow enabled $501 million in shareholder returns, including a 10% quarterly dividend increase. Generac’s AI Power Pivot Raises a Bigger Question About Data Center Demand Cummins (NYSE:CMI) reported record second-quarter sales and EBITDA for 2026, driven by continued demand for power generation equipment used in data centers, improving North American truck markets and stronger activity in China. Second-quarter revenue rose 9% year over year to a record $9.5 billion. EBITDA increased to $1.7 billion, although EBITDA margin declined to 17.5% of sales from 18.4% a year earlier. Net income was $932 million, or $6.73 per diluted share, compared with $890 million, or $6.43 per share, in the prior-year quarter. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control 3 Picks-and-Shovels Ways to Invest in AI Without Betting on Chipmakers Chair and CEO Jennifer Rumsey said higher global power-generation demand, especially from data centers, and international construction-market strength supported the quarter. The company raised its full-year revenue outlook, now expecting 2026 sales growth of 10% to 13%, up from prior guidance for 8% to 11% growth. Cummins also lifted the midpoint of its full-year EBITDA margin outlook to a range of 18% to 18.5%. Power Systems revenue climbed 19% to a record $2.3 billion in the quarter, while segment EBITDA margin rose to 24.5% from 22.8% a year earlier. Rumsey said demand remained particularly strong for backup power systems supporting data centers in the U.S., China and Southeast Asia. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Engines to AI: Cummins’ Surprising Growth Driver The company recently signed a multiyear agreement with an existing global hyperscaler customer, providing visibility into several gigawatts of future backup-power generator demand. Cummins also announced an agreement with Circe Energy to supply natural-gas generator sets and integrated microgrid technology for a behind-the-meter prime-power solution serving a high-performance-computing data center in Texas. Cummins is expanding its global production capacity and developing a 130-liter natural-gas generator platform for the prime-power market. However, Rumsey said 2026 growth will remain constrained by available capacity for larger generator-set configurations. CFO Mark Smith said the company is generally selling new power-generation equipment into the second half of 2028. → 3 Drone Stocks That Should Soar After the Summer Slump For the full year, Cummins maintained its forecast for Power Systems revenue growth of 14% to 19%. The company expects segment EBITDA margin of 25% to 25.75%, reflecting strong performance as well as higher investments in the second half to develop its natural-gas platform and expand its prime-power position. Cummins raised its outlook for North American heavy-duty truck production to 240,000 to 250,000 units in 2026, compared with its previous range of 230,000 to 250,000 units. The company cited stronger recent orders, improved fleet profitability and better visibility into second-half demand. Its North American medium-duty truck outlook increased to 130,000 to 140,000 units, from a prior range of 125,000 to 135,000 units. Cummins attributed the revision to stronger expected second-half demand, improving OEM outlooks and a modestly higher pre-buy following recent emissions-regulation clarification. Second-quarter North American revenue rose 8%. Industry heavy-duty truck production declined 4% to 60,000 units, while Cummins’ heavy-duty unit sales increased 2% to 23,000 units. North American Power Systems revenue increased 19%, supported by data-center demand and manufacturing capacity added late in 2025. International revenue increased 12%, led by China. Revenue in China, including joint ventures, rose 30% to $2.3 billion as data-center demand accelerated and on-highway and construction markets improved. Power-generation equipment sales in China surged 88%. The company now expects China revenue, including joint ventures, to increase about 15% in 2026, up from its prior outlook for a 10% increase. Cummins also improved its expectation for China medium- and heavy-duty truck demand to a range of down 5% to up 5%, compared with prior guidance of down 10% to flat, citing export demand in Africa and Southeast Asia. Rumsey said the Environmental Protection Agency’s proposed rule regarding North American on-highway 2027 emissions requirements provides greater clarity for the industry. Cummins plans to use proposed implementation flexibilities to phase in its new HELM engine platforms while continuing to make certain current products available. Limited production of the model-year 2027 X15 and X10 engines is expected to begin in January 2027, with full X10 production expected in the third quarter and full X15 production expected in the fourth quarter, based on OEM launch plans. The company expects current X12 and L9 engines used in truck and transit-bus applications to remain available during the transition. Its next-generation B platform remains scheduled for a January 2028 launch, while the current B platform is expected to be available throughout 2027. Rumsey said the phased approach should produce a smoother demand transition than the company had previously anticipated. Smith said Cummins expects to pass non-conformance penalties associated with current products through to the market and does not anticipate a significant financial impact from them. He added that research and development costs will remain elevated for longer because of the staggered transition. Operating cash flow reached a record $1.5 billion for a second quarter, compared with $785 million a year earlier, primarily due to improved working capital. Cummins returned $501 million to shareholders through $225 million in share repurchases and $276 million in dividends. Its board approved a 10% quarterly dividend increase, marking the company’s 17th consecutive year of dividend growth. Engine segment revenue rose 6% to $3.1 billion, while EBITDA margin fell to 12.5% from 13.8% amid higher research, development and freight costs. Components revenue increased 7% to $2.9 billion, with EBITDA margin declining to 13.2% from 14.7%. Distribution revenue rose 9% to a record $3.3 billion, while EBITDA margin decreased to 13.6% from 14.6%, partly due to incentive compensation and freight expenses. Accelera revenue increased 38% to $145 million, and its EBITDA loss improved to $69 million from a $100 million loss a year earlier. Smith said incentive compensation expense increased as Cummins projected record full-year financial performance, but the run rate should be lower in each of the final two quarters than it was in the second quarter. The company expects full-year capital investments of $1.35 billion to $1.45 billion and an effective tax rate of about 23%, excluding discrete items. Cummins Inc (NYSE: CMI) is a global power technology company that designs, manufactures, distributes and services a broad portfolio of diesel and natural gas engines, electrified powertrains, power generation systems and related components. Founded in 1919 and headquartered in Columbus, Indiana, Cummins has grown into one of the world's leading suppliers of internal combustion engines and a provider of technologies that reduce emissions and improve fuel efficiency. The company's product lineup includes heavy-, medium- and light-duty engines for on-highway and off-highway applications, generator sets and power systems for commercial and industrial use, and key engine components such as turbochargers, fuel systems, air handling, filtration and aftertreatment solutions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cummins Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.