Cummins logo is seen displayed in this illustration taken April 10, 2023. REUTERS/Dado Ruvic/Illustration

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By Apratim Sarkar

(REUTERS) -U.S. truck engine maker Cummins on Thursday reported third-quarter results above Wall Street estimates, driven by strong demand for its power generation systems and distribution segments, sending its shares up nearly 7%.

However, its clean energy unit Accelera's electrolyzer business remained a weak spot as it continues to struggle with scale and operational efficiency amid a slow ramp-up in adoption.

"Lower demand expectations have impacted the electrolyzer business...primarily due to reduced U.S. government incentives and slower international market development," said CEO Jennifer Rumsey.

Despite the drag, Accelera, along with data center power systems, continued to experience strong growth, helping to mitigate the effects of a slowdown in North American truck demand for Cummins.

The company said it would not provide an outlook for the rest of 2025 but plans to issue a forecast for the next financial year in February.

The company's Power Systems segment - which manufactures generators - was up 18% in the quarter from a year earlier, its Distribution segment - which handles global sales, service and support - rose 7%. Accelera's revenue was up 10%.

Its Engine segment's revenue fell 11% to $2.6 billion.

"Weaker volumes within medium- and heavy-duty markets weighed on Engine margins," said Jefferies analyst Stephen Volkmann.

The Indiana-based company reported an adjusted profit of $5.59 per share. Analysts, on average, had expected $4.81 per share, according to data compiled by LSEG.

Cummins' quarterly revenue of $8.32 billion beat estimates of $7.97 billion.

The company increased its quarterly dividend to $2.00 per share from $1.82.

(Reporting by Apratim Sarkar; Editing by Vijay Kishore)