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Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.52 a share, which topped the Zacks Consensus Estimate of $1.21 owing to higher-than-anticipated sales from North America On-Highway, North America Off-Highway, Defense, Outside North America On-Highway and Service Parts, Support Equipment & Other end markets. The bottom line increased 32% on a year-over-year basis from $1.15 per share. Quarterly revenues of $718 million grew 11% from the year-ago period and crossed the consensus mark of $676 million.
Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise
Allison segregates revenues in terms of end markets served, which are as follows:
In the reported quarter, net sales in the North America On-Highway end market jumped 19% year over year to $333 million amid continued robust customer demand for last-mile delivery, regional haul and vocational trucks. Also, the metric surpassed the Zacks Consensus Estimate of $327 million.
Net sales in the North America Off-Highway end market declined 11% to $24 million from the year-ago period but crossed the Zacks Consensus Estimate of $23.96 million.
In the reported quarter, net sales in the Defense end market declined 13% year over year to $47 million. However, the figure topped the consensus estimate of $41.15 million.
The Outside North America On-Highway end market’s net sales rose 24% year over year to $131 million in the quarter, led by improved demand in Europe, Asia and South America and outpaced the consensus mark of $105 million.
Net sales in the Outside North America Off-Highway end market declined 17% year over year to $29 million and lagged the consensus mark of $31.5 million.
Net sales in the Service Parts, Support Equipment & Other end markets rose 9% year over year to $154 million in the quarter, owing to higher demand for global service parts and support equipment and aluminum die-cast components. Moreover, the figure crossed the consensus mark of $142 million.
Financial Position
Allison saw a gross profit of $338 million, an 11% increase from $305 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Adjusted EBITDA in the quarter came in at $245 million, an increase of 11% from $220 million a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter increased to $97 million from $79 million for the same period in 2021, driven by higher commercial activity expenses. Engineering – research and development expenses were $49 million, almost at the same level as the fourth quarter of 2021.
Allison had cash and cash equivalents of $232 million on Dec 31, 2022, up from $127 million as of Dec 31, 2021. Long-term debt was $2,501 million, marginally down from $2,504 million as of Dec 31, 2021.
Net cash provided by operating activities increased to $224 million from $168 million for the same period in 2021, owing to a lower working capital requirement and a higher gross profit. Adjusted free cash flow in the reported quarter was $132 million, an increase from $105 million a year ago due to higher gross profit and higher net cash provided by operating activities.
In the fourth quarter, Allison repurchased $55 million of its common stock.
2023 Outlook
Allison’s full-year 2023 estimated net sales are in the band of $2,825-$2,925 million. Net income is expected in the band of $500-$550 million, and adjusted EBITDA is estimated within $965-$1,025 million. Adjusted free cash flow is estimated within $480-$530 million. Its expected net cash provided by operating activities is between $605 and $665 million. Capex numbers are in the band of $125-$135 million.
Zacks Rank & Key Picks
ALSN currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . While WNC and MOD sport a Zacks Rank #1 (Strong Buy), HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
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Allison (ALSN) Q4 Earnings & Sales Beat, Registers Y/Y Growth
Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.52 a share, which topped the Zacks Consensus Estimate of $1.21 owing to higher-than-anticipated sales from North America On-Highway, North America Off-Highway, Defense, Outside North America On-Highway and Service Parts, Support Equipment & Other end markets. The bottom line increased 32% on a year-over-year basis from $1.15 per share. Quarterly revenues of $718 million grew 11% from the year-ago period and crossed the consensus mark of $676 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:
In the reported quarter, net sales in the North America On-Highway end market jumped 19% year over year to $333 million amid continued robust customer demand for last-mile delivery, regional haul and vocational trucks. Also, the metric surpassed the Zacks Consensus Estimate of $327 million.
Net sales in the North America Off-Highway end market declined 11% to $24 million from the year-ago period but crossed the Zacks Consensus Estimate of $23.96 million.
In the reported quarter, net sales in the Defense end market declined 13% year over year to $47 million. However, the figure topped the consensus estimate of $41.15 million.
The Outside North America On-Highway end market’s net sales rose 24% year over year to $131 million in the quarter, led by improved demand in Europe, Asia and South America and outpaced the consensus mark of $105 million.
Net sales in the Outside North America Off-Highway end market declined 17% year over year to $29 million and lagged the consensus mark of $31.5 million.
Net sales in the Service Parts, Support Equipment & Other end markets rose 9% year over year to $154 million in the quarter, owing to higher demand for global service parts and support equipment and aluminum die-cast components. Moreover, the figure crossed the consensus mark of $142 million.
Financial Position
Allison saw a gross profit of $338 million, an 11% increase from $305 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Adjusted EBITDA in the quarter came in at $245 million, an increase of 11% from $220 million a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter increased to $97 million from $79 million for the same period in 2021, driven by higher commercial activity expenses. Engineering – research and development expenses were $49 million, almost at the same level as the fourth quarter of 2021.
Allison had cash and cash equivalents of $232 million on Dec 31, 2022, up from $127 million as of Dec 31, 2021. Long-term debt was $2,501 million, marginally down from $2,504 million as of Dec 31, 2021.
Net cash provided by operating activities increased to $224 million from $168 million for the same period in 2021, owing to a lower working capital requirement and a higher gross profit. Adjusted free cash flow in the reported quarter was $132 million, an increase from $105 million a year ago due to higher gross profit and higher net cash provided by operating activities.
In the fourth quarter, Allison repurchased $55 million of its common stock.
2023 Outlook
Allison’s full-year 2023 estimated net sales are in the band of $2,825-$2,925 million. Net income is expected in the band of $500-$550 million, and adjusted EBITDA is estimated within $965-$1,025 million. Adjusted free cash flow is estimated within $480-$530 million. Its expected net cash provided by operating activities is between $605 and $665 million. Capex numbers are in the band of $125-$135 million.
Zacks Rank & Key Picks
ALSN currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . While WNC and MOD sport a Zacks Rank #1 (Strong Buy), HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.