Cummins Q1 Earnings Surpass Expectations, Revenues Fall Y/Y

Cummins Inc. CMI reported first-quarter 2025 earnings of $5.96 per share, which surpassed the Zacks Consensus Estimate of $4.82 and increased from $5.10 recorded in the corresponding quarter of 2024. The outperformance was driven by higher-than-expected revenues from the Power Systems, Distribution and Accelera segments. Cummins’ revenues totaled $8.20 billion, which beat the Zacks Consensus Estimate of $8.07 billion but declined from $8.40 billion recorded in the year-ago quarter. 

Cummins Inc. Price, Consensus and EPS Surprise

Cummins Inc. price-consensus-eps-surprise-chart | Cummins Inc. Quote

Key Takeaways

In the reported quarter, sales in the Engine segment were down 5% year over year to $2.8 billion. The metric also missed our estimate of $2.87 billion. Sales in North America and International markets decreased 4% and 11% year over year, respectively, due to weaker on-highway demand in the United States and Latin America. The segment’s EBITDA rose to $458 million (accounting for 16.5% of sales) from $414 million (14.1% of sales) in the year-ago period and beat our estimate of $419.7 million.

Sales in the Distribution segment totaled $3.1 billion, which rose 13% year over year and topped our projection of $2.71 billion. Sales in North America rose 10% due to increased demand for power generation products, while international sales fell 1%. The segment’s EBITDA came in at $376 million (12.9% of sales), which increased from the year-ago quarter’s $294 million (11.6% of sales) and surpassed our estimate of $340.3 million.

Sales in the Components segment totaled $2.7 billion, down 20% from the prior-year quarter. Sales also missed our estimate of $2.89 billion. Revenues in North America decreased 20% and international sales contracted 20% on the separation of the Atmus business and lower on-highway demand in the United States and Europe. The segment’s EBITDA was $382 million (14.3% of sales), lower than the year-ago figure of $473 million (14.2% of sales). The metric also lagged our estimate of $403.7 million.

Sales in the Power Systems segment rose 19% from the year-ago quarter to $1.6 billion and beat our estimate of $1.47 billion. While North America sales grew 15%, international sales rose 22% due to increased demand for power generation. The segment’s EBITDA rose to $389 million (23.6% of sales) from $237 million (17.1% of sales) and beat our estimate of $284.8 million.

Sales in the Accelera segment came in at $103 million, which rose 11% from the year-ago level and topped our estimate of $101.5 million. The segment incurred a pretax loss of $86 million, narrower than our estimate of a loss of $104 million. Investment in zero-emission contributed to the EBITDA losses.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

CMI's Financials

Cummins’ cash and cash equivalents were $1.53 billion as of March 31, 2025, down from $1.67 billion as of Dec. 31, 2024. Long-term debt totaled $4.79 billion, up from $4.78 billion as of Dec. 31, 2024.

Cummins’s Zacks Rank & Key Picks

CMI carries a Zacks Rank #3 (Hold) at present.

Some better-ranked stocks in the auto space are Hesai Group HSAI and Standard Motor Products, Inc. SMP. HSAI sports a Zacks Rank #1 (Strong Buy), while SMP carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for HSAI’s 2025 earnings indicates year-over-year growth of 336.36%, respectively. EPS estimates for 2026 have improved 12 cents in the past 30 days.

The Zacks Consensus Estimate for SMP’s 2025 sales and earnings implies year-over-year growth of 17.1% and 12.62%, respectively. EPS estimates for 2025 and 2026 have improved 6 cents and a penny, respectively, in the past 60 days.

Only $1 to See All Zacks' Buys and Sells

We're not kidding.

Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.

Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com