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Allison (ALSN) Down 2.8% Since Q2 Earnings & Sales Beat
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Although Allison Transmission (ALSN - Free Report) delivered second-quarter earnings beat, announced on Jul 28 after the closing bell, the stock failed to gain. In fact, over the past eight trading sessions since its earnings release, it inched down 2.8%.
The world's largest manufacturer of fully automatic commercial-duty transmissions posted second-quarter earnings of $1.01 a share, topping the Zacks Consensus Estimate of 92 cents and significantly increasing from the year-ago period’s 20 cents. Higher-than-expected revenues from North America Off-Highway, Outside North America On-Highway and Defense segments led to the outperformance. Quarterly revenues of $603 grew 60% from the comparable year-ago period and surpassed the consensus mark of $594 million.
Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise
Allison segregates revenues in terms of end markets served, which are as follows:
For the reported quarter, net sales in the North America On-Highway end market soared 84% year over year to $302 million, thanks to persistent recovery in global on-highway customer demand from the pandemic-related woes witnessed in the corresponding quarter of 2020. Nonetheless, the metric missed the Zacks Consensus Estimate of $314 million.
For the April-June period, net sales in the North America Off-Highway end market jumped to $9 million from $3 million recorded in the year-ago period. The metric also surpassed the Zacks Consensus Estimate of $4.03 million.
For the second quarter, net sales in the Defense end market rose 14% year over year to $48 million on higher tracked vehicle demand. Further, the figure surpassed the consensus estimate of $45.05 million.
The Outside North America On-Highway end market’s net sales surged 63% year on year to $98 million for the June-end quarter. The metric also topped the consensus mark of $84 million.
Net sales in the Outside North America Off-Highway end market contracted 5% year on year to $18 million and missed the consensus mark of $19.93 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 44% year on year to $128 million for the reported quarter, owing to higher demand for North America service parts as well as support equipment. Nonetheless, the figure fell short of the consensus mark of $134 million.
Financial Position & ’21 View
Allison — whose peers include Magna International (MGA - Free Report) , Adient plc (ADNT - Free Report) and Meritor — had cash and cash equivalents of $238 million on Jun 30, 2021 compared with $310 million as of 2020-end. As of Jun 30, long-term debt was $2,505 million, essentially unchanged from the 2020-end level. Adjusted free cash flow for the reported quarter was $95 million, up from the prior-year quarter’s $67 million.
The company reiterated its full-year guidance. Allison projects net sales in the band of $2,325-$2,475 million. Net income and adjusted EBITDA are now envisioned in the band of $395-$465 million and $795-$885 million, respectively. Adjusted free cash flow is expected within $415-$475 million for 2021. Capex is projected between $170 million and $180 million.
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Allison (ALSN) Down 2.8% Since Q2 Earnings & Sales Beat
Although Allison Transmission (ALSN - Free Report) delivered second-quarter earnings beat, announced on Jul 28 after the closing bell, the stock failed to gain. In fact, over the past eight trading sessions since its earnings release, it inched down 2.8%.
The world's largest manufacturer of fully automatic commercial-duty transmissions posted second-quarter earnings of $1.01 a share, topping the Zacks Consensus Estimate of 92 cents and significantly increasing from the year-ago period’s 20 cents. Higher-than-expected revenues from North America Off-Highway, Outside North America On-Highway and Defense segments led to the outperformance. Quarterly revenues of $603 grew 60% from the comparable year-ago period and surpassed the consensus mark of $594 million.
Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise
Allison Transmission Holdings, Inc. price-consensus-eps-surprise-chart | Allison Transmission Holdings, Inc. Quote
Segmental Performance
Allison segregates revenues in terms of end markets served, which are as follows:
For the reported quarter, net sales in the North America On-Highway end market soared 84% year over year to $302 million, thanks to persistent recovery in global on-highway customer demand from the pandemic-related woes witnessed in the corresponding quarter of 2020. Nonetheless, the metric missed the Zacks Consensus Estimate of $314 million.
For the April-June period, net sales in the North America Off-Highway end market jumped to $9 million from $3 million recorded in the year-ago period. The metric also surpassed the Zacks Consensus Estimate of $4.03 million.
For the second quarter, net sales in the Defense end market rose 14% year over year to $48 million on higher tracked vehicle demand. Further, the figure surpassed the consensus estimate of $45.05 million.
The Outside North America On-Highway end market’s net sales surged 63% year on year to $98 million for the June-end quarter. The metric also topped the consensus mark of $84 million.
Net sales in the Outside North America Off-Highway end market contracted 5% year on year to $18 million and missed the consensus mark of $19.93 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 44% year on year to $128 million for the reported quarter, owing to higher demand for North America service parts as well as support equipment. Nonetheless, the figure fell short of the consensus mark of $134 million.
Financial Position & ’21 View
Allison — whose peers include Magna International (MGA - Free Report) , Adient plc (ADNT - Free Report) and Meritor — had cash and cash equivalents of $238 million on Jun 30, 2021 compared with $310 million as of 2020-end. As of Jun 30, long-term debt was $2,505 million, essentially unchanged from the 2020-end level. Adjusted free cash flow for the reported quarter was $95 million, up from the prior-year quarter’s $67 million.
The company reiterated its full-year guidance. Allison projects net sales in the band of $2,325-$2,475 million. Net income and adjusted EBITDA are now envisioned in the band of $395-$465 million and $795-$885 million, respectively. Adjusted free cash flow is expected within $415-$475 million for 2021. Capex is projected between $170 million and $180 million.
Last week, Allison — which presently carries a Zacks Rank #3 (Hold) — declared third-quarter dividend of 19 cents a share, payable on Aug 27 to shareholders of record as of Aug 16. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.