Cummins Inc.

Cummins Inc. makes engines, power-generation systems and vehicle components, and sells parts and maintenance through a distribution network. Its five businesses are Engine, Components, Distribution, Power Systems and Accelera. It trades on the New York Stock Exchange as CMI and reports on a December 31 year-end.

Earnings through September 2026

The previous year's reported profit included $210 million of Accelera goodwill impairment and a $30 million inventory write-down. Excluding those charges, prior earnings per share were $5.59. The current $8.25 includes $0.54 from favorable discrete tax items. The EBITDA comparison excludes the prior charges and measures earnings before interest, tax, depreciation and amortization.

Power Systems sales reached $2.289 billion, including sales to other Cummins businesses. Segment EBITDA was $582 million, versus $457 million, and its margin rose to 25.4% from 22.9%. Data-center demand and favorable pricing supported the improvement. Engine and Components EBITDA rose to $422 million and $408 million respectively; Distribution EBITDA fell to $461 million from $492 million as variable compensation costs increased.

Light-duty automotive sales fell to $500 million from $583 million. Management expects weak North American pickup orders to persist through the fourth quarter, while medium- and heavy-duty trucks and power generation remain stronger.

How the forecast changed

In August, Cummins raised its full-year sales-growth forecast to 10%–13% and its EBITDA-margin range to 18%–18.5%. It now expects sales growth of approximately 10% and a margin of about 18.2%. Both margin forecasts exclude the $199 million first-quarter fuel-cell disposal and customer-obligation charge.

The company still expects fourth-quarter sales to rise from the third quarter and reach a new record. Current annual targets include Power Systems revenue growth of 15%–18% and a segment EBITDA margin of 25.10%–25.60%. It plans $1.35 billion to $1.45 billion of capital spending for 2026.

Cash generation and financing

First-nine-month operating cash flow was $3.213 billion, versus $2.087 billion. Working-capital movements used $480 million, versus $1.406 billion, with supplier payments and accrued expenses providing much of the improvement. Inventories and receivables still required more cash. Capital spending was $741 million, versus $691 million.

At September 30, cash and equivalents were $3.571 billion, up from $2.845 billion at the previous year-end. Marketable securities added $614 million. Carrying debt, including finance leases, was $7.519 billion, compared with $7.552 billion at December 2025.

The $4 billion bank facilities back Cummins' commercial-paper program. Outstanding commercial paper of $348 million left effective revolving capacity of $3.652 billion. The bank facilities themselves were undrawn.

Cummins paid $854 million in dividends and $827 million in cash share repurchases during the first nine months. Its existing repurchase authorization had $1.385 billion remaining at September. The quarterly dividend was increased in July to $2.20 a share.

Changes in Accelera and the battery investment

Accelera's September-quarter sales were $103 million and its EBITDA loss was $56 million. Its loss a year earlier was $336 million, including the $240 million of noncash charges. Lower electrolyzer sales reduced current revenue, while battery and electric-powertrain development and fulfillment of earlier electrolyzer commitments continued to cost money.

Cummins sold its low-pressure fuel-cell business to a customer in the first quarter of 2026, cancelled future commitments and settled claims. Cummins made a net $175 million payment as part of those transactions and recorded a $199 million charge.

In September, its Hydrogenics subsidiaries recommended that customers stop using HyLYZER electrolyzers after a planned review of fleet operating data. No recall campaign had begun when the report was filed. The company was assessing possible modifications and could not yet estimate the cost.

Cummins owns 30% of the unconsolidated Amplify battery-cell venture. The partners agreed to finish the facility but delay manufacturing equipment installation; the production start date is uncertain. Cummins' investment carried a $398 million value, and it had $366 million of future contractual contributions with uncertain timing. It reported no current impairment of that investment.