Cummins Q4 Earnings Beat on Strong Performance From Power Systems Unit

Core Insights - Cummins Inc. reported Q4 2025 earnings of $5.81 per share, exceeding the Zacks Consensus Estimate of $5.20 and up from $5.16 in Q4 2024, driven by strong performance in Power Systems [1][10] - Total revenues for Cummins reached $8.53 billion, surpassing the Zacks Consensus Estimate of $8.15 billion and increasing from $8.45 billion in the previous year [1][10] Engine Segment - Sales in the Engine segment decreased by 4% year over year to $2.60 billion, although it exceeded the estimate of $2.38 billion [2] - EBITDA for the Engine segment fell to $263 million (10.1% of sales) from $367 million (13.5% of sales) in the prior year, missing the estimate of $320.8 million [2] Distribution Segment - Distribution segment sales totaled $3.3 billion, a 7% year-over-year increase, surpassing the projection of $3.13 billion [3] - North American sales rose by 10%, while international sales grew by 2%, with EBITDA reaching $495 million (15.1% of sales), up from $400 million (13% of sales) in the previous year [3] Components Segment - Sales in the Components segment were $2.4 billion, down 7% from the prior year but above the estimate of $2.3 billion [4] - EBITDA for this segment was $327 million (13.4% of sales), lower than the previous year's $361 million (13.7% of sales) but above the estimate of $316.7 million [4] Power Systems Segment - Power Systems segment sales increased by 11% year over year to $1.93 billion, exceeding the estimate of $1.9 billion [5] - EBITDA rose to $418 million (21.7% of sales) from $314 million (18% of sales), surpassing the estimate of $415 million [5] Accelera Segment - Accelera segment sales reached $131 million, a 31% increase from the previous year, exceeding the estimate of $100.7 million [6] - The segment reported an EBITDA loss of $374 million, wider than the estimated loss of $173.1 million, attributed to investments in zero-emission technologies [6] Financial Position - As of December 31, 2025, Cummins had cash and cash equivalents of $2.84 billion, up from $1.67 billion a year earlier [7] - Long-term debt increased to $6.79 billion from $4.78 billion as of December 31, 2024 [7] 2026 Guidance - Cummins anticipates revenue growth of 3-8% year over year for 2026, with an expected EBITDA margin of 17-18% of sales [8]