Cummins' Q2 revenue down from waning truck sales; predicts current order levels as 'unsustainably low'

During Cummins’ Q2 2025 earnings call, the leading engine OEM noted that it was not immune to the protracted freight recession or the recent impact of tariffs, which led to a 2% decrease in total revenue compared to Q2 2024. In North America, revenues declined by 6%. 

The down segments included:

• Engine decreased 8% overall; 8% in N.A
• Components decreased 9% overall; down 15% in N.A.
• Accelera (clean energy) decreased 5%

And Cummins thinks truck sales will get worse in Q3, dropping 25% or more.

This was caused by several external factors that depressed new truck sales, with the three-year freight downturn being the most significant. The Trump administration’s undulating tariff policy has also caused hesitation due to the effects on consumer behavior. In addition, these factors combined with the EPA’s rollback of emissions regulations and proposed elimination of the “EV mandate” have blunted the expected MY2027 pre-buy and tempered demand for low- and zero-emission vehicles.

Still, Cummins generated $8.6 billion for the quarter, which the Columbus, Indiana-based company views as a net positive because it could have been a lot worse if not for two segments overperforming.

Sales for the distribution segment were up 7% and Power Systems saw a 19% increase.

“We delivered impressive results in the second quarter, led by record performance in our Distribution and Power Systems segment that more than offset continued softening in the North America truck market,” Jennifer Rumsey, Cummins' chair and CEO, told analysts on the Aug. 5 call. “The record financial performance from these two segments, along with strong operational execution across our entire company, led to EBITDA increasing three ten basis points year over year despite North America heavy- and medium-duty truck volumes declining 30% from a year ago.”

Rumsey explained that Cummins has negotiated customer agreements and implemented dual sourcing in its manufacturing supply chain to mitigate tariff exposure and “enter fourth quarter near full recovery.”

Volumes down across all truck segments

Industrywide, the heavy-duty truck side added 57,000 units, down 27% YOY, while medium-duty added 28,000 units in Q2, a drop of 36%.

Cummins specifically sold 22,000 heavy-duty engines (down 29%) and 25,000 for medium-duty engines, a 35% drop from 2024.

Cummins also supplies Ram Trucks with the 6.7L Turbo Diesel inline six-cylinder engine for their HD pickups (2500, 3500, 4500, and 5500). In Q2, they provided 34,000 engines, 18% fewer than last spring.

Rumsey’s also noted because “end-user confidence has declined” in the trucking sector, the second half of 2025 will not look much better, as North America truck build rates decline sharply, starting in the third quarter.

Rumsey projected “North America heavy- and medium-duty truck volumes to decline 25% to 30% from second quarter levels, as we have seen truck orders recently reach multiyear lows and OEMs have initiated reduced work weeks through the next three months.”

When new sales go down, though, it usually has an inverse effect on the aftermarket, as fleets focus more on repairing and replacing their current units. Because of this, Rumsey said, “Aftermarket demand for parts and service remains stable.”

Cummins also explained that the Acclera business, which comprised only $105 million, or a scant 1% of total revenue, went down due to lower electrolyzer installations used to make green hydrogen. On the trucking side, hydrogen took a big hit when Nikola, the most prominent fuel cell truck maker, went bust earlier in March. Electrolyzers are used in industry as well for power generation.

Overall, Cummins maintains the company is in a solid position due to the many segments it has.

“Our diversified portfolio, disciplined cost management, and strong execution have enabled us to navigate recent industry challenges,” Rumsey said. “However, persistent economic and regulatory uncertainty continues to impact a number of our key markets and cloud our near-term outlook for both business and market performance."

When will it end?

According to Rumsey, the conclusion to this lengthy trucking downturn in North America “will largely depend on the trajectory of the broader economy, the evolution of trade and tariff policies, and the pace at which regulatory clarity emerges.”

Cummins CFO Mark Smith also spoke on the call, adding that the OEMs have adjusted production labor to align with slower sales. In July, Class 8 leader Daimler Truck North America temporarily laid off 2,000 plant workers in the U.S. and Mexico. Volvo Trucks North America cut 800 jobs in April.

“We view current order levels as unsustainably low, but immediate catalysts for recovery are not yet clear,” Smith said. “We have not yet felt the full impact from tariffs, and there is still uncertainty about duration and ongoing levels, which was highlighted again last week with the flurry of new announcements.”

Those announcements included several trade deals the White House made with the European Union and Asia.

“It remains to be seen what impact this will have on business confidence and the demand for capital goods beyond trucks,” Smith offered.  “We’ve worked hard to mitigate the impact of tariffs, and while negative to profitability in the second quarter, we should enter the fourth quarter close to a price-cost neutral position with regard to tariffs.”

Trucking could also see some relief in the form of the “One Big Beautiful Bill” passed in July.

“By passing this bill, Congress averted the largest tax increase in our nation’s history," said Chris Spear, president and CEO of American Trucking Associations. “Neither the economy nor our supply chain would have survived such a travesty. This is our money, not the government’s, and truckers know better than anyone how to reinvest it to promote prosperity.”

Alain Bédard, president and CEO of logistics company TFI International, surmised the bill could provide some relief.

“We feel way better—that we’re finally going to get out of this freight recession,” Bédard said, as reported in FleetOwner. “Hopefully, things will start to roll. We haven’t seen anything concrete yet, but all the signs are there.”