Mike Wolanin | The Republic A view of Cummins Engine Plant 1 from the fifth floor of the newly renovated Cummins Technical Center in Columbus., Wednesday, Nov. 6, 2024. The technical center was closed for three years as it was renovated.
Mike Wolanin | The Republic A view of Cummins Engine Plant 1 from the fifth floor of the newly renovated Cummins Technical Center in Columbus., Wednesday, Nov. 6, 2024. The technical center was closed for three years as it was renovated.
Cummins Inc. said on Monday that it is “entering uncharted territory” as the company withdrew its full-year guidance, citing uncertainty about the potential impact of the Trump administration’s tariffs.

Cummins, which is headquartered in Columbus and is the largest employer in the area, said “the economic environment has changed significantly over the past three months.”

The company had previously said it expected 2025 full-year revenue to be down 2% to up 3% compared to last year.

“We are entering uncharted territory as the trade tariffs start to have a more significant impact beginning in the second quarter,” said Cummins Chair and CEO Jennifer Rumsey. “The breadth and changing nature of the tariffs have introduced a great degree of uncertainty and mean that at this time we are unable to predict with confidence our expected performance for the year.”

On Monday, Cummins reported $8.2 billion in revenue during the first three months of the year, down 3% from the same period in 2024.

The company also posted first-quarter earnings per share of $5.96, down from $14.03 a year earlier, though last year’s figure included a gain related to the separation of the company’s former filtration business — now a standalone company called Atmus — net of transaction costs and other expenses.

Sales in the company’s engine and components segments fell during the first quarter, while they increased in its distribution, power systems and Accelera segments.

Segment performances

Engine: Sales of $2.8 billion were down 5% compared to the January-March period last year. Revenues decreased 4% in North America and 11% in international markets due to lower on-highway demand in the United States and Latin America.

Components: Sales of $2.7 billion were down 20% compared to the first quarter of 2024. Revenues in North America decreased by 20% and international sales decreased by 20% primarily due to the separation of Atmus and lower on-highway demand in the United States and Europe.

Distribution: Sales of $2.9 billion were up 15% compared the same quarter last year. Revenues in North America increased 22% and international sales dropped 1% primarily due to increased demand for power generation products in North America and favorable pricing.

Power Systems: Sales of $1.6 billion were up 19% compared to the January-March period last year. Revenues in North America increased 15% and international sales increased 22% driven primarily by increased power generation demand, particularly for the data center market.

Accelera: Sales of $103 million represented a 11% increased compared to the same period last year. Revenues improved due to increased eMobility demand and electrolyzer installations.

Economic uncertainty

Cummins officials said the “changing and evolving nature of the tariffs” has created a heightened level of uncertainty and is a key factor hindering the company’s ability to forecast its financial performance this year.

At the same time, company officials said they been taking some measures to mitigate their potential impact.

Those measures include what Rumsey described as “inventory strategies” in areas where officials are anticipating higher tariffs, though she did not provide more details.

“Of course, mitigating when there is a high degree of uncertainty is a little bit tricky, because we’re waiting to have a little more clarity on where tariffs will go over time,” Rumsey said.

Rumsey told analysts on Monday that she spoke with original equipment manufacturers and fleet customers last week, who told her “they just don’t know (about tariffs).”

“They’re just waiting because there’s a huge amount of uncertainty on what’s going to happen economically and with tariffs,” Rumsey said. “That’s really it, it’s a wait and see.”

For his part, Cummins Chief Financial Officer Mark Smith said “a few more data points would be helpful” for Cummins to be able to reinstate full-year guidance.

“The April truck orders I would describe as disappointing,” Smith said. “So, is that something that can move back to a normal trend level? Tariffs are designed to be disruptive to trade, right? I mean, that’s what they’re designed for, and we’ve seen that significant slowing, certainly of freight activity into the (U.S.) west coast. That directly impacts ultimately road freight here in the U.S. Even if things — let’s hope they stabilize and improve — we’ve caused a slowing of the global supply chain.”

In the meantime, Rumsey said Cummins is “in a strong position strategically and financially with an experienced leadership team, well versed in navigating through period of uncertainty.”

Analysts react

Local analysts agreed that Cummins posted what they described as “pretty good” and “very strong” quarter despite the uncertainty around tariffs.

Dan Gretzinger, equity research analyst at Columbus-based Kessler Investment Group, said the diversified nature of Cummins’ business helped the company overcome a challenging economic environment.

“My takeaway was the diversification,” Gretzinger said. “That’s what has kept them in pretty good shape. Two segments down, but two other ones were up pretty nicely. So, you kind of have a classic Cummins diversity leads to a half-way decent quarter despite the struggles.”

Mike Petry, senior equity analyst at Columbus-based Kirr, Marbach and Co., said Cummins’ first-quarter results were largely “very strong,” particularly given the circumstances.

However, uncertainty driven by the potential impact of tariffs still looms large.

“The backdrop is that it’s very uncertain for the industry, for Cummins specifically,” Petry said. “…The current results are very good, with the exception of the continuing softening in the North American heavy-duty truck market. But overall, the consolidated results are very strong. The question, of course, is what comes next.”
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