CMI · 10-Q · 2026Q2 · Full report
Operating Margin Drivers
CUMMINS INC · 2026-08-04 · Importance 31 · Surprise 32 · No source text
Gross margin increased $184 million in the second quarter and $272 million in the first half of 2026, primarily because of higher volumes and favorable pricing. Second-quarter gross margin declined 0.3 percentage points to 26.1% because higher compensation expenses offset volume and pricing benefits, while the six-month gross margin rate remained 26.4%. Operating income declined 6% year to date to $2,228 million from $2,360 million, mainly because of the $199 million low-pressure fuel-cell transaction charge and higher compensation costs. Power Systems EBITDA increased $122 million in the quarter and $310 million year to date, with EBITDA margin expanding 1.7 and 3.7 percentage points, respectively, due to higher volumes and improved operational leverage.
Key facts
- Outlook: Company expects Accelera to have continued near-term operating losses due to ongoing investments in priority technologies despite restructuring actions source
- Three months ended June 30, 2026 consolidated gross margin: $2,465 million and gross margin percent 26.1% source
- Company states six months ended June 30, 2026 gross margin increase $272 million versus prior year and gross margin percentage remained flat source
- Net income attributable to Cummins Inc. for three months ended June 30, 2026: $932 million, or $6.73 per diluted share (stated also as $6.73 diluted EPS and $932 million in narrative) source
- Net income attributable to Cummins Inc. for six months ended June 30, 2026: $1,586 million, or $11.44 per diluted share source
- Power Systems segment EBITDA for three months ended June 30, 2026 increased $122 million versus comparable period in 2025; for six months ended increased $310 million source
- Company states three months ended June 30, 2026 gross margin increase $184 million versus prior year and gross margin percentage decreased 0.3 points source
- Net income attributable to Cummins Inc. for three months ended June 30, 2025: $890 million, or $6.43 per diluted share source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | probable | — | Outlook: Company expects Accelera to have continued near-term operating losses due to ongoing investments in priority technologies despite… |
| margin | unclear | realized | — | Three months ended June 30, 2026 consolidated gross margin: $2,465 million and gross margin percent 26.1% |