Cummins Inc., a leading U.S. manufacturer of truck engines, exceeded Wall Street expectations for fourth-quarter revenue and profit, driven by robust demand for its power generation products. This positive performance propelled the company’s shares up 3.5% in premarket trading.
The surge in demand stems from the intensifying competition among tech giants in the artificial intelligence arena. Data centers, essential for running AI language models, require substantial power, significantly benefiting power solutions providers like Cummins.
This increased energy demand fueled double-digit sales growth in Cummins’ Distribution and Power Systems segments, which focus on the sale and maintenance of power generators. Despite this strong quarter, Cummins projects a decline in annual sales due to the sluggish recovery in the North American heavy-duty truck market.
The machinery industry is grappling with an oversupply of equipment and weakened demand. However, analysts predict that the trucking sector will be the first to stabilize.
“In 2025, we anticipate that demand will be slightly weaker in the North America on-highway truck markets, particularly in the first half of the year, but offset by strength in other key markets,” stated Jennifer Rumsey, CEO of Cummins.
The Indiana-based company forecasts its 2025 revenue to fall within a range of down 2% and up 3%. This projection contrasts with analyst expectations of 1.72% growth, according to LSEG data.
For the quarter ending December 31, Cummins reported a net income of $418 million, or $3.02 per share. This figure includes $312 million in charges related to the reorganization of its new power unit, Accelera.
Excluding these charges, Cummins earned $5.14 per share, exceeding analyst estimates of $4.68 per share. Net sales reached $8.45 billion, surpassing the projected $8.07 billion. This strong financial performance underscores Cummins’ ability to capitalize on emerging market trends, even amidst challenges in traditional sectors. The company’s focus on power generation positions it well for continued growth in the evolving energy landscape.
