Cummins Inc. Cummins (CMI) had a bit of a mixed bag for its second quarter. The power solutions company posted record revenue, which is nice, but it also missed on earnings, which is less nice. Investors focused on the latter, sending shares lower on Tuesday.

Revenue came in at $9.457 billion, up 9% from $8.643 billion a year ago and ahead of the $9.330 billion analysts were looking for. But diluted GAAP EPS, while higher at $6.73 versus $6.43, fell short of the $7.33 estimate.

Earnings Miss Overshadows Record Revenue

Net income attributable to Cummins rose to $932 million from $890 million. EBITDA increased to $1.653 billion from $1.587 billion, though the margin narrowed to 17.5% from 18.4%. The results included $29 million, or 21 cents per share, of unfavorable tax items, and higher incentive compensation also pressured margins.

Breaking it down by segment, Engine sales rose 6% to $3.084 billion, but EBITDA fell to $386 million and margin declined to 12.5%. Shipments increased to 161,200 units from 147,000. Improved tariff recovery partly offset higher research, development, and freight costs.

Components sales were up 7% to $2.891 billion, with EBITDA of $381 million. Distribution revenue increased 9% to $3.326 billion, and EBITDA rose to $451 million.

Data-Center Demand Lifts Power Systems

The star of the show was Power Systems, where sales jumped 19% to $2.255 billion on strong data-center demand. EBITDA increased to $552 million, with margin expanding to 24.5% from 22.8%. Accelera, the company's electrification business, saw sales climb 38% to $145 million, while its EBITDA loss narrowed to $69 million from $100 million.

Cummins also said it will supply natural-gas generator sets for a Texas data center from 2026 through 2030. And it revised its 2027 North American launch plans, including a measured X10 and X15 ramp and continued availability of select legacy products.

Cash Flow And Shareholder Returns

Operating cash flow rose to $1.499 billion from $785 million, while capital expenditures were $249 million. Cash and cash equivalents totaled $3.179 billion, and debt-to-capital was 35.6%.

Cummins returned $501 million through dividends and repurchases and raised its quarterly dividend to $2.20 from $2.00.

Cummins Raises Full-Year Outlook

Looking ahead, Cummins raised its 2026 sales outlook to $37.037 billion to $38.047 billion from $36.364 billion to $37.374 billion, compared with the $37.224 billion estimate. Revenue is expected to rise 10% to 13%, while EBITDA margin is forecast at 18% to 18.5%. Power Systems revenue is projected to increase 14% to 19%, with a 25% to 25.75% margin.

North American heavy-duty truck demand is expected to rise 10% to 15%, while medium-duty demand is forecast to increase 20% to 30%.

On the conference call, CEO Jennifer Rumsey said, "In North America, Cummins expects demand to remain largely flat amid ongoing tariff and interest-rate uncertainty."

At the time of publication on Tuesday, Cummins shares were down 3.28% at $627.54.