Cummins posts record $1.8 billion EBITDA on AI power demand, then cuts guidance on pickup trucks
Cummins printed a record EBITDA quarter on data-center power demand, then cut its full-year revenue outlook on weak US pickup trucks, missed Street estimates, and reported it one day after the stock dropped 5.3% on election-driven selling across data-center names.
Vincent Jiang · 2 min read
Cummins+1.11% — Cummins, up 1.11 percent as of its last quote filed its third-quarter results with the SEC this morning, and the headline is real: EBITDA of $1.8 billion was a record 18.9% of sales, net income more than doubled to $1.14 billion, and diluted EPS hit $8.25 against $3.86 a year ago 1. But the print missed Wall Street, revenue of $9.44 billion against a $9.87 billion estimate, and the company cut full-year revenue growth guidance to roughly 10% from 10% to 13% 14.
The stock had already fallen 5.3% the day before to $474.15, about 36% below its June high of $737.76 2. A record quarter that needed to beat, and did not.
Data center power is carrying the record
Power Systems, the generator and high-horsepower engine unit, is the whole story. Its sales rose 15% to $2.3 billion on data-center demand in the United States, China and Asia Pacific, and its EBITDA margin hit 25.4% of sales, up from 22.9% 1. In August the company booked its largest-ever battery energy storage deployment for a large US data center project 1. CEO Jennifer Rumsey called global demand for power generation equipment exceptionally strong and guided fourth-quarter revenue to a new record 14.
Power Systems earns 25.4 cents of EBITDA per sales dollar, far ahead of Cummins' other units
Data-center demand puts Power Systems' margin nearly double every other segment
Data
| Value | |
|---|---|
| Power Systems | 25.4 |
| Engine | 13.5 |
| Distribution | 13.9 |
| Components | 14.3 |
The complication is a consumer truck rollover
The guidance cut came from one soft spot: North American pickup truck demand, which Rumsey said has weakened and is expected to persist through year-end 14. Distribution's margin also slipped to 13.9% from 15.5% despite data-center demand 1. Meanwhile Accelera, the zero-emissions unit, shrank by choice: sales down 15% to $103 million with a $56 million EBITDA loss as electrolyzer sales wind down under strategic review 1. The diesel-and-generator boom is subsidizing its retreat. Investors should also strip $0.54 per share of favorable discrete tax items from the EPS 1.
Same boom, weaker profit elsewhere
The same day, Cummins India fell as much as 14% after its own quarter missed badly: EBITDA margin down 658 basis points to 15.36% on commodity and freight costs, profit down 26.7% 3. Power-generation demand does not guarantee profitability, even inside the same group.
What settles it
Watch two readings: whether Q4 revenue sets the promised record, and whether Power Systems holds a mid-20s margin as US data-center policy risk, the force behind the November 4 selloff, plays out 12.
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