Heavy-duty truck engines are pictured in Cummins’ Jamestown Engine Plant. Submitted photo

The market for medium and heavy duty trucks was already soft this year – and Cummins officials see the situation getting worse in the third quarter of 2025.

Mark Smith, Cummins chief financial officer, and Jennifer Rumsey, Cummins president and CEO, told investor analysts during a conference call Tuesday that North American heavy and medium-duty truck volume is expected to decline 25% to 30% from second quarter levels. Truck orders are already at multi-year lows, Smith said, and companies that make parts for Cummins have begun limited work weeks that are expected to last the next three months.

The Jamestown Engine Plant is affected by the decreased demand for heavy-duty truck engines.

“The duration of this reduced demand in North America truck markets 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,” Smith said.

Engine Segment sales came in at $2.9 billion in the second quarter of 2025, an 8% decrease from the second quarter in 2024 while the segment’s EBITDA totaled $400 million, or 13.8% of sales, compared to $445 million, or 14.1% of sales in the second quarter of 2024. Revenues decreased 8% in North America and 7% in international markets due to lower on-highway demand in the United States and Mexico.

Jennifer Rumsey, Cummins president and CEO, told analysts there are several reasons for softening demand for trucks. Economic demand isn’t growing for customers, interest rates are high and the truck buying market was already in a period where demand was expected to be low. Demand could rebound when more stringent environmental regulations take effect in 2027, but the situation is uncertain at this point.

“Which, then add on top of it this uncertainty around tariff policy, the impact that’s going to have on price of trucks and regulatory uncertainty, which means customers are really just holding, waiting to see what happens, get more stability and clarity on orders,” Rumsey said. “And in Q2, build rates held up okay. We saw some softening. But as Mark noted, we’re seeing a lot more down days and our customers and us restructuring in our plants in anticipation of a much weaker Q3. How long will it last is a little bit hard to predict. The optimistic gen would say we get more tariff clarity and stability in Q3 and more certainty on regulation. We still believe today that we’ll have ’27 NOx regulation. And if we do, then that will likely drive demand back up. But it’s uncertain right now.”

The news isn’t all bad. Company-wide sales in North America declined 6%, but international revenues increased 5% due to higher demand in Europe and China. Net income attributable to Cummins in the second quarter was $890 million, or $6.43 per diluted share, compared to $726 million, or $5.26 per diluted share, in 2024. Earnings before interest, taxes, depreciation and amortization (EBITDA) in the second quarter were $1.6 billion, or 18.4% of sales, compared to $1.3 billion, or 15.3% of sales, a year ago. EBITDA measures a company’s profitability by showing how much profit a company is making from its core business operations, before accounting for certain non-cash expenses and financing costs.

According to the Associated Press, the results announced Tuesday beat Wall Street expectations. The average estimate of eight analysts surveyed by Zacks Investment Research was for earnings of $4.99 per share. The engine maker posted revenue of $8.64 billion in the period, also exceeding Street forecasts. Seven analysts surveyed by Zacks expected $8.47 billion.

Cummins Inc. officials are not giving a full-year outlook for revenue or profits amid economic and regulatory uncertainty.

“As we navigate these uncertainties, we will continue to maintain discipline by managing our costs while continuing to invest to meet our critical priorities so that we are well positioned as markets recover. In summary, we had a strong second quarter performance that demonstrates the earnings potential of Cummins at a time when demand in North America and China truck market sits at weak levels,” Rumsey said. “While we expect demand in North America truck markets to decline significantly in the third quarter from second quarter levels, we remain well positioned with an experienced leadership team that has demonstrated capability in managing through periods of uncertainty, and we will maintain our focus on our customers, employees and shareholders. I’m confident that we will further raise our performance when markets recover and look forward to reinstating guidance when some of the uncertainty has subsided.”