I'll research Cummins (CMI) before writing the preview. Let me start by gathering recent filings, earnings, and news.Let me read the most recent quarter's earnings materials and the recent analyst day, plus get stock price data.I have strong fundamentals. Let me quickly pull the Analyst Day highlights (new medium-term targets) and check recent news, including the late-July stock move.I now have what I need. Let me quickly grab the prior-year (Q2 2025) actuals to frame the year-over-year comparison.# Cummins Inc. (CMI) — Q2 2026 Earnings Preview
Cummins goes into this print as one of the year's momentum stories in industrials. The stock closed around $649 on Aug 3, having nearly doubled off its August 2025 low near $356. Notably, though, shares have cooled from their late-June peak of ~$728 (roughly 11% below the high), and traded soft into the print — dipping to ~$606 on July 29 before recovering. In other words, expectations are elevated but sentiment has become slightly less one-sided heading into the report.
The core narrative: a Power Systems / data center boom offsetting (and now outrunning) a North America truck market recovering off cyclical lows. Management has now raised full-year guidance twice this year, and the May 21 Analyst Day lifted 2030 targets, so the bar for a "beat-and-raise" continuation is high.
Consensus for Q2 2026 (per the pre-earnings digest):
| Metric | Q2 2026 Est. | Q2 2025 Actual | Implied Y/Y |
|---|---|---|---|
| Total revenue | ~$9.32B | $8.64B | +7.9% |
| EPS | ~$7.19 | $6.43 | +12% |
| Power Systems | $2.18B | $1.89B | +15.5% |
| Engine | $3.03B | $2.90B | +4.5% |
| Components | $2.78B | $2.71B | +3% |
| Distribution | $3.38B | $3.04B | +11.3% |
For context, Q2 2025 delivered $8.64B revenue, EPS of $6.43, and 18.4% EBITDA margin. Q1 2026 came in at $8.4B revenue with 17.7% EBITDA margin ex-charge and $6.15 EPS ex-charge (GAAP EPS was $4.71 after a $1.44/share charge on the low-pressure fuel cell divestiture).
This is the swing factor for the stock. On the Q1 call, CMI raised FY2026 revenue guidance to +8% to +11% (from +3% to +8%) and EBITDA margin to 17.75%–18.5% (from 17.0%–18.0%). Management explicitly said the first half is running stronger than expected while keeping the second half largely unchanged. With a "strong Q2 ahead" telegraphed, investors will want to see whether continued truck-market momentum and data-center strength push the outlook higher again — and, importantly, whether the beat is "quality" or reliant on one-timers.
Power Systems is the crown jewel. Q1 posted a record 29.5% EBITDA margin (up from 23.6% a year ago) on 19% revenue growth. But management flagged that ~29.5% is not repeatable — it benefited from net tariff recoveries, front-half-weighted China demand, and one-time cost recoveries. Full-year guidance is 25%–26%, so a sequential step-down in Q2 margin is expected and should not spook investors. Watch the absolute EBITDA dollars and any commentary on the $450M capacity expansion (to 55 GW by 2030) and data-center order book.
Q1 showed NA heavy-duty industry production down 23% y/y, but management said orders and spot rates inflected sharply — they're adding a third shift at Rocky Mount and ramping heavy-duty engine build rates from ~240/day early in the year toward ~400/day by end-June. FY guidance was raised to 230k–250k HD units and 125k–135k MD units. The key nuance: how much of 2H strength is genuine freight recovery versus prebuy ahead of the 2027 EPA rules, and whether supply-chain constraints cap the upside.
A live overhang. Management delayed the B-series (7-liter) launch to January 2028 while keeping X15 and X10 on track for 2027, and is awaiting a revised draft rule (expected around this quarter). Any update on the final rule, potential non-compliance penalties, content-per-truck economics (industry estimates ~$10k of added content per truck, much of it in the powertrain where CMI plays), and pricing would be a meaningful catalyst.
China surprised to the upside in Q1 (+19% including JVs, with data-center power gen up 84%), driving a big guidance swing — full-year China revenue is now expected +10% vs. a prior -1%. Watch whether this momentum sustained into Q2, keeping in mind China power-gen demand tends to be first-half weighted.
Two clean-up items trending favorably: FY Accelera EBITDA loss guidance improved to -$270M to -$300M (from -$325M to -$355M) after the fuel-cell exit, and management continues to characterize the net tariff impact as immaterial to EBITDA. Confirmation of both supports the earnings-quality story.
| Segment | Revenue Guide | EBITDA Margin Guide |
|---|---|---|
| Engine | +7% to +12% | 12.5%–13.5% |
| Components | +5% to +10% | 13.5%–14.5% |
| Distribution | +9% to +14% | 13.7%–14.7% |
| Power Systems | +14% to +19% | ~25%–26% |
| Accelera | Rev $300–350M | Loss $270–300M |
Cummins remains committed to returning ~50% of operating cash flow to shareholders. In Q1 it returned $519M ($243M buybacks at ~$537 avg, $276M dividends) — notably restarting repurchases. The dividend sits at $2.00/quarter (raised 16 consecutive years). With the stock now ~$650, watch whether buyback pace continues at higher prices. Q1 operating cash flow was a positive $309M (vs. a small outflow a year ago); working capital (receivables/inventory build to support the ramp) is worth monitoring as production scales.
Management raised 2030 targets to $45–50B revenue and >20% EBITDA margin (up from $43–48B and 17–18%), underpinned by a 6–9% revenue CAGR built on three roughly equal pillars: data-center growth, content/on-highway recovery, and other markets + aftermarket. Data-center revenue is targeted to grow from ~$5B in 2026 to >$9B by 2030, with new prime-power, natural gas (up to 4MW), and mining engine platforms broadening the story. This reframes CMI from a truck-cycle play toward a more diversified power franchise — a key reason for the multiple re-rating.
Risk skew: With shares off their highs and having wobbled into the print, a clean beat-and-raise with sustained Power Systems margins could re-energize the stock; conversely, a "good but not raised" quarter — or Power Systems margin normalization read negatively — is the more likely source of a pullback given rich expectations.
Note: Estimates cited reflect pre-earnings consensus; actual reported figures and any updated guidance should be checked against the release when it crosses the wire.