Abstract

Cummins will report its fiscal second-quarter 2026 results on August 04, 2026 Pre-Market, with investors focused on revenue growth, margin trend normalization, and the path of adjusted EPS amid cyclical demand and new power investments.

Market Forecast

Consensus points to fiscal Q2 2026 revenue of 9.32 billion US dollars, up 10.51% year over year, with EBIT forecast at 1.33 billion US dollars and adjusted EPS at 7.23, implying year-over-year growth of 29.60% and 40.84%, respectively. The company’s prior report implies a gross margin baseline of 26.71% and a net profit margin of 7.79% for the last quarter; current-quarter margin forecasts are not explicitly provided, though mix improvement from components and power systems is expected to support incremental expansion. Cummins’s main businesses last quarter were Distribution at 3.11 billion US dollars, Components at 2.14 billion US dollars, Engines at 1.97 billion US dollars, Power Systems at 1.09 billion US dollars, and New Power at 0.09 billion US dollars. New Power is positioned as the most promising growth avenue given the low base and ongoing investments, though the revenue base remains 0.09 billion US dollars.

Last Quarter Review

Cummins posted fiscal Q1 2026 revenue of 8.40 billion US dollars, with a gross margin of 26.71%, GAAP net income attributable to the parent of 0.65 billion US dollars, a net profit margin of 7.79%, and adjusted EPS of 6.15, up 3.19% year over year. Quarter on quarter, net income grew 10.29%, supported by operating efficiency and a stable pricing environment. By segment, Distribution generated 3.11 billion US dollars, Components 2.14 billion US dollars, Engines 1.97 billion US dollars, Power Systems 1.09 billion US dollars, and New Power 0.09 billion US dollars.

Current Quarter Outlook (with major analytical insights)

Main business trajectory and near-term demand signals

Cummins’s core revenue drivers remain Engines, Components, Distribution, and Power Systems. The guidance embedded in consensus reflects steady demand in North America on-highway and off-highway markets with incremental resilience in aftermarket and service revenue captured in Distribution, helping to stabilize consolidated gross margin from the 26% level. Components continues to benefit from content-per-vehicle gains, emissions systems mix, and an ongoing refresh cycle across OEM customers; this should support conversion on higher volume assumptions in the quarter, underpinning the EBIT growth forecast. Power Systems demand tied to data center power and backup generation remains a meaningful tailwind, and order cadence suggests sustained utilization, which can provide mix support for margins within the quarter even as global industrial indicators remain mixed.

Most promising business and medium-term profit drivers

New Power is positioned as the highest potential growth vector over the medium term, anchored by fuel cell, electrolyzer, and battery-electric platforms. While the revenue base remains small at 0.09 billion US dollars last quarter, a higher order funnel for electrolyzers and early commercial deployments of fuel-cell solutions are building multi-year visibility. Margin drag from scale-up costs is expected near term, but content expansion and service attachment should widen long-run margin accretion once scale thresholds are met. A balanced ramp, supported by policy incentives and infrastructure buildout, would translate into higher EPS leverage beyond the current fiscal year as overhead absorption improves.

Key stock price swing factors this quarter

The first swing factor is volume and mix versus plan in Engines and Components, as small deviations can meaningfully affect consolidated gross margin given fixed-cost absorption. The second is Power Systems exposure to data center and critical infrastructure spending, where stronger shipments can lift blended margin and EBIT beyond consensus. The third is the pace of New Power commercialization; while still small, incremental orders or disclosures on electrolyzer backlog and fuel-cell partnerships could bolster sentiment toward long-term growth, even if near-term profitability remains modest. Pricing discipline and input-cost trends, particularly in commodities and logistics, will also influence flow-through from the 9.32 billion US dollars revenue run-rate to the 1.33 billion US dollars EBIT target.

Analyst Opinions

Across recently published institutional commentaries, the majority stance is bullish. Analysts highlight improving end-market stability in North America, sustained aftermarket strength in the Distribution segment, and a favorable mix in Components and Power Systems supporting margin resilience against a cyclical backdrop. The prevailing view underscores upside risk to EBIT conversion given a higher content share per vehicle and increasing data center-related demand in Power Systems, with adjusted EPS tracking above the prior-year level toward the 7.23 mark. The minority cautious opinions point to potential order volatility in global off-highway and construction markets and execution risk in New Power, but these concerns are generally balanced by aftermarket visibility and a solid balance of price and cost. Overall, the consensus tilt is toward better-than-feared top-line growth and constructive margin quality in fiscal Q2 2026, setting up a supportive setup into the print.