Cummins Inc ( CMI ). shares rose after the company reported third-quarter 2025 results that exceeded Wall Street expectations, demonstrating resilience amid soft truck demand and continued strength in data center power markets.

Revenue came in at $8.32 billion, above the $7.97 billion consensus, but down 2% year over year. Meanwhile, adjusted EPS of $5.59 also beat expectations of $4.81.

GAAP net income was $536 million, or $3.86 per diluted share, compared with $809 million, or $5.86 per share, a year earlier. Results included $240 million, or $1.73 per share, in non-cash charges tied to the Accelera segment’s electrolyzer business.

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EBITDA was $1.2 billion, or 14.3% of sales, versus $1.4 billion, or 16.4%, a year ago.

“Cummins delivered strong operating results in the third quarter, driven by profitable growth in our Power Systems and Distribution segments, due in part to continued rising demand for backup power for data centers,” said Chair and CEO Jennifer Rumsey.

North American sales declined 4%, offset by a 2% increase internationally, driven by stronger demand in China and Europe. The company’s tax rate rose to 32.7% due to non-deductible Accelera charges and $36 million, or 26 cents per share, in tax costs tied to the One Big Beautiful Bill Act.

Segment Performance

The Engine segment generated $2.6 billion in sales, down 11% from the previous year, due to lower medium-duty and heavy-duty truck demand in the United States and Mexico. Segment EBITDA fell to $261 million, or 10% of sales.

The Components segment saw sales decline 15% to $2.3 billion, reflecting weaker North American demand, with EBITDA of $292 million, or 12.5% of sales.

The Distribution segment continued to outperform, with revenue up 7% to $3.2 billion and EBITDA rising to $492 million, or 15.5% of sales, on strong power generation demand.

The Power Systems segment remained a bright spot, with sales increasing 18% to $2.0 billion, driven by surging data center demand across North America, India, and China, resulting in $457 million in EBITDA, or 22.9% of sales.

The Accelera segment posted $121 million in revenue, up 10%, but logged an EBITDA loss of $336 million due to $240 million in goodwill and inventory write-downs, as the company adjusted to slower hydrogen adoption and reduced incentives.

Dividend Hike

Cummins raised its quarterly dividend to $2.00 from $1.82, marking its 16th consecutive annual increase, which underscores confidence in its cash generation.

Komatsu Partnership

The company also inked a memorandum of understanding with Komatsu to develop hybrid powertrains for heavy mining equipment, advancing its decarbonization strategy.

Outlook

“While uncertainty in a number of our end markets persists, our strong third quarter results are a testament to our diversified portfolio, effective cost discipline and commitment to delivering for our customers,” said Rumsey.

“Cummins continues to operate from a position of strength as we navigate this dynamic environment, and we look forward to reinstating our financial guidance in February when we provide our outlook for 2026,” she added.

The company did not issue revenue or profit guidance for the rest of 2025 but plans to reinstate forecasts in February alongside its 2026 outlook.

Shares traded higher following the results as investors welcomed the stronger-than-expected quarter and ongoing operational discipline.

Price Action: CMI shares were trading higher by 6.96% to $469.75 at last check Thursday.

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