“The fundamentals have improved a little bit,” Smith said. (Luke Sharrett/Bloomberg)
February 6, 2026 12:22 PM, EST
Key Takeaways:
- Cummins expects a stronger heavy-duty truck pre-buy in late 2026 as fleets plan for 2027 emissions rules.
- Rising orders and improving fundamentals are supporting a more optimistic market outlook for the company.
- Power systems and distribution growth helped offset heavy-duty weakness, lifting quarterly revenue and profit.
Cummins is eyeing a stronger-than-previously-expected U.S. heavy-duty truck pre-buy as the engine maker prepares for product launches ahead of the introduction of revised emissions regulations, the company’s top executives said Feb. 5.
A rosier picture is certainly welcome after what Chief Financial Officer Mark Smith called “a long dry spell” for the heavy-duty truck sector in North America.
Expectations of a rolling stock pre-buy by fleets in late 2025 onward ahead of stiffer nitrogen oxide tailpipe emissions regulations in 2027 powered prognostications by analysts and truck makers before the Trump administration stalled proceedings.
But a pre-buy is now a burgeoning prospect.
“It’s quite unusual to have this level of uncertainty this close to a regulatory implementation date. So the EPA indication late last year … that they’ll move forward with the ’27 NOx rule was an important step to giving more regulatory certainty,” CEO Jennifer Rumsey said.
The Environmental Protection Agency is set to leave in place a Biden-era requirement that NOx emissions for heavy-duty trucks drop to 35 milligrams per horsepower-hour from 200 mg/hp-hr. The agency is expected to publish an updated rule in March or April.
And Smith and Rumsey told analysts during Cummins’ Feb. 5 fourth-quarter 2025 earnings call that pre-buy purchases, alongside a recovery in on-highway heavy-duty truck production levels due to cyclical replacement demand from fleets, would boost engine shipments in the second half of 2026.
“We are assuming we’ll see some pre-buy in the second half of [the] year. You know, there’s a combination of the natural coming out of the down cycle for the truck market, the more stability and tariffs that will cause customers to start buying trucks again, and then pre-buy in the second half of the year, but we’re really watching to try to understand how much will that be,” Rumsey said.
Smith added: “The fundamentals have improved a little bit.”
Cummins Q4 2025 Earnings Report
“You saw strong orders in December, improvement in orders last month, but how … that flows over the course of the year. I think we’re all watching and ‘cautiously optimistic’ is what I would say. And then, you know, if demand does start to strengthen, how quickly can the supply base flex back up? Because it dropped quite dramatically last year. So those are the things to watch,” Rumsey noted.
Rumsey and Smith both noted Cummins product launches were on the way in 2026 ahead of the revised regulations’ implementation.
Cummins expects North American heavy-duty truck production to be between 220,000 and 240,000 vehicles, which it calculated would be flat with 2025 to as much as 10% higher. The company expects North American medium-duty truck production in a range of 110,000 to 120,000 vehicles, also flat to up 10%.
Columbus, Ind.-based Cummins shipped 23,300 heavy-duty truck engines in the most recent quarter, a decrease of 20.7% compared with 29,400 engines in the year-ago period. The most recent quarter saw a 9.1% decrease in medium-duty engine shipments to 68,800 units from 75,700 in the same period 12 months earlier.
Overall in 2025, Cummins shipped 101,900 heavy-duty truck engines, down 23.3% compared with 132,900 engines in 2024. Cummins’ medium-duty vehicle engine sales fell 9.6% to 280,500 from 310,300 units in 2024.
Cummins’ engine division reported revenue of $2.6 billion in the most recent quarter, a decrease of 4% compared with $2.72 billion in Q4 2024.
However, weakness in heavy-duty truck markets, particularly in North America, was offset by higher prices, increased power generation sales and a rise in pickup truck engine sales when all Cummins divisions were accounted for.
Cummins posted net income of $593 million in Q4, a bump of 29.5% compared with $418 million in the same period in 2024. The company’s Q4 revenue totaled $8.54 billion, an increase of 1% from $8.45 billion.
The company’s power systems division saw sales rise 11% to $1.9 billion from $1.74 billion in the year-ago period.
Revenue in North America increased 15% and international sales increased 8%, driven primarily by demand from data centers in North America, China and Asia-Pacific, it said.
In addition, the distribution division reported $3.29 billion in revenue in the three months that ended Dec. 31, up 7% from $3.07 billion a year earlier, with North American sales rising 10% on data center usage.
As well as weak heavy-duty truck demand, tariffs hurt Cummins’ bottom line in Q4, the company said, with the prospects mixed for 2026.
Section 232 heavy-duty truck and parts imports unveiled in October remain an area of uncertainty for Cummins and truck makers.
“The gross impact of tariffs accumulated through the year, the headlines were one thing, but it took time for those costs to start filtering through the supply chain, managing, negotiating, optimizing. But the fourth quarter was clearly the biggest growth impact,” Smith said.
“They are still working through the details of the engine offset program. So we’re waiting for clarity on how that will work,” Rumsey said, adding that more details are expected after the end of the first quarter.
