(Reuters) - U.S. truck engine maker Cummins Inc on Tuesday reported fourth-quarter revenue and profit above Wall Street estimates on strong demand for its power generation products, sending the company's shares up 3.5% before the bell.
The artificial intelligence race among big tech giants has led to a surge in power demand from data centers that run AI language models, boosting sales for power solutions providers.
The rise in energy demands led to a double digit sales growth for Cummins' Distribution and Power Systems segments, which engage in sale and maintenance of power generators.
However, the company expects annual sales to decline as the recovery in the North American heavy-duty truck market remains sluggish.
The machinery industry is currently facing an oversupply of equipment and reduced demand, but analysts believe the trucking sector will be the first to stabilize.
"In 2025, we anticipate that demand will be slightly weaker in the North America on-highway truck markets, particularly in the first half of the year, but offset by strength in other key markets," Cummins CEO Jennifer Rumsey said in a statement.
The Indiana-based company forecast its 2025 revenue to be within a range of down 2% and up 3%. Analysts were expecting a 1.72% growth, according to data compiled by LSEG.
For the quarter ended Dec. 31, Cummins reported net income of $418 million, or $3.02 per share, which included $312 million in charges from the reorganization of its new power unit, Accelera.
Excluding these charges, the engine maker earned $5.14 per share, surpassing analyst's estimates of $4.68 per share.
Net sales came in at $8.45 billion, compared to estimates of $8.07 billion.
(Reporting by Raechel Thankam Job; Editing by Shailesh Kuber)
