Cummins posts slight rise in revenue, records charges on Accelera strategic review

By Apratim Sarkar and Aatreyee Dasgupta

Feb 5 (Reuters) - U.S. truck engine maker Cummins CMI.N on Thursday posted a marginal rise in fourth-quarter revenue, on the back of strong demand for its power generation systems and distribution segments.

Cummins softened the hit in its engine and components segments from weaker North American truck demand by leaning on strong distribution and power systems segments sales on the back of robust demand for data center backup power.

"Power Systems (sales) while up 11% year-on-year was below expectations, which have continued to climb through 2025," analysts said in a Jefferies note.

Shares of the Columbus, Indiana-based company fell nearly 9% during morning trade.

Along with the rise in sales in the Power Systems segment - which manufactures generators, its Distribution segment - which handles global sales, service and support - rose 7% in the reported quarter from a year earlier. Revenue at the its clean energy segment, Accelera, was up 31%.

As part of Cummins' strategic review of Accelera, initiated in response to policy driven shifts in hydrogen adoption expectations, the company incurred a quarterly charge of $218 million related to the electrolyzer business within the segment.

The company's quarterly profit rose by 41% from a year ago to $4.27 per share. This includes charges of $1.54 per share related to Accelera.

"In 2026, we anticipate that demand will be slightly better in the North America on-highway truck markets, particularly in the second half of the year, paired with continued strength in data center power generation markets," said CEO Jennifer Rumsey during the earnings call.

"We're taking orders now well into 2028; the demand remains very strong for diesel backup power," Rumsey added.

CFO Mark Smith further noted that with the fourth quarter seeing the most impact from tariffs during 2025, looking forward, given the current regime of tariffs, the company expects annual margin dilution of about 50 basis points.

Cummins forecast full-year 2026 revenue in the range of up 3% to 8%.

Its fourth-quarter revenue rose 1% to $8.54 billion.