Cummins' first quarter results reflected strong operational execution within its Power Systems segment, even as overall revenue declined compared to last year. Management attributed the outperformance to robust data center and aftermarket demand, particularly in North America and China, and continued progress on new product launches. CEO Jennifer Rumsey highlighted, “We delivered very strong results in the first quarter, led by record performance in our Power Systems segment.” The company also noted improved gross margins, driven by pricing actions and operational efficiencies, which more than offset the headwinds from softening North American truck markets and the recent Atmus divestiture.

Is now the time to buy CMI? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Cummins’s Q1 Earnings Call

• Jamie Cook (Truist Securities) pressed for quantification of tariff costs and segment impact. CFO Mark Smith declined to provide figures due to uncertainty, emphasizing mitigation efforts and the intention to pass on costs, while CEO Jennifer Rumsey discussed varying backlog visibility between business units.

• Jerry Revich (Goldman Sachs) asked if Power Systems’ record margins were sustainable. Smith confirmed results reflected strong operational execution, noting aftermarket sales were unusually high but not solely driven by data center demand. He expects some margin variability based on future demand.

• Angel Castillo (Morgan Stanley) inquired about near-term tariff impact on volumes and margins for Q2. Smith said tariffs were immaterial in Q1 but expected a growing impact in upcoming quarters, stressing broader uncertainty on economic demand.

• David Raso (Evercore ISI) questioned if demand concerns stem from customer resistance to tariff-driven price increases. Rumsey replied that uncertainty is causing customers to delay orders, rather than direct pushback on pricing actions.

• Steven Fisher (UBS) sought clarity on the timing of new engine launches and the factors needed to reinstate guidance. Rumsey reiterated 2027 launch timelines remain unchanged, while Smith said more data on truck orders and tariff duration is needed before updating guidance.

Catalysts in Upcoming Quarters

In the coming quarters, StockStory analysts will be tracking (1) the pace and success of tariff mitigation strategies and cost pass-throughs, (2) order trends and backlog changes in Power Systems and aftermarket, and (3) regulatory developments around U.S. emissions rules for 2027 and global trade policy shifts. Progress on new product commercialization and hydrogen project execution will also be closely monitored.

Cummins currently trades at $324.20, up from $299.85 just before the earnings. In the wake of this quarter, is it a buy or sell? See for yourself in our full research report (it’s free).

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