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Allison Transmission Holdings (ALSN - Free Report) delivered second-quarter 2024 earnings of $2.13 per share, which rose 11% year over year and beat the Zacks Consensus Estimate of $2.04. Record quarterly revenues of $816 million grew 4% from the year-ago period's level and outpaced the Zacks Consensus Estimate of $799 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 rose 14.8% year over year to $456 million and surpassed the Zacks Consensus Estimate of $413 million. High demand for Class 8 vocational and medium-duty trucks and price increases on certain products resulted in sales growth.
Net sales in the North America Off-Highway end market fell 96% to $1 million from the year-ago period and also lagged the Zacks Consensus Estimate of $5.14 million.
In the reported quarter, net sales in the Defense end market jumped 30.3% year over year to $43 million, driven by higher demand for Tracked vehicle applications. However, the metric marginally missed the Zacks Consensus Estimate of $43.47 million.
The Outside North America On-Highway end market’s net sales of $128 million increased from $123 million generated in the corresponding quarter of 2023, primarily due to robust demand from Asia and price increases on some products. However, the metric missed the Zacks Consensus Estimate of $130 million.
Net sales in the Outside North America Off-Highway end market declined 8.3% year over year to $22 million and also missed the Zacks Consensus Estimate of $29.2 million.
Net sales in the Service Parts, Support Equipment & Other end markets decreased 9% year over year to $166 million in the quarter and also missed the Zacks Consensus Estimate of $171 million.
Financial Position
Allison saw a gross profit of $394 million, which increased from $381 million reported in the year-ago quarter, mainly driven by higher net sales and price increases in certain products.
Adjusted EBITDA in the quarter came in at $301 million, which rose from $288 million reported a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter decreased to $82 million from $92 million reported in the prior-year quarter. Engineering – research and development expenses totaled $49 million compared with $47 million recorded in the corresponding quarter of 2023.
Allison had cash and cash equivalents of $648 million as of Jun 30, 2024, down from $555 million recorded as of Dec 31, 2023. Long-term debt amounted to $2.4 billion compared with $2.5 billion as of Dec 31, 2023.
Net cash provided by operating activities totaled $171 million. Adjusted free cash flow in the reported quarter totaled $150 million, up from $122 million generated in the year-ago period.
Updated 2024 Outlook
Allison now expects full-year 2024 net sales in the band of $3.09-$3.17 billion, up from the previously guided range of $3.05-$3.15 billion. Net income is expected in the band of $650-$700 million, up from the previous guidance of $635-$685 million. Adjusted EBITDA is estimated in the range of $1.085-$1.145 billion, up from the previous outlook of $1.07-$1.13 billion.
ALSN expects net cash provided by operating activities between $715 million and $775 million, up from the previous estimate of $700-$760 million. Capex is expected in the band of $125-$135 million. Adjusted free cash flow is estimated between $590 million and $640 million, up from the previous guidance of $575-$625 million.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.11% and 9.93%, respectively. EPS estimates for 2024 and 2025 have improved 19 cents and 29 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 and 2026 have improved 5 cents and 4 cents, respectively, in the past seven days.
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Allison (ALSN) Q2 Earnings Beat Estimates, Guidance Revised
Allison Transmission Holdings (ALSN - Free Report) delivered second-quarter 2024 earnings of $2.13 per share, which rose 11% year over year and beat the Zacks Consensus Estimate of $2.04. Record quarterly revenues of $816 million grew 4% from the year-ago period's level and outpaced the Zacks Consensus Estimate of $799 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 rose 14.8% year over year to $456 million and surpassed the Zacks Consensus Estimate of $413 million. High demand for Class 8 vocational and medium-duty trucks and price increases on certain products resulted in sales growth.
Net sales in the North America Off-Highway end market fell 96% to $1 million from the year-ago period and also lagged the Zacks Consensus Estimate of $5.14 million.
In the reported quarter, net sales in the Defense end market jumped 30.3% year over year to $43 million, driven by higher demand for Tracked vehicle applications. However, the metric marginally missed the Zacks Consensus Estimate of $43.47 million.
The Outside North America On-Highway end market’s net sales of $128 million increased from $123 million generated in the corresponding quarter of 2023, primarily due to robust demand from Asia and price increases on some products. However, the metric missed the Zacks Consensus Estimate of $130 million.
Net sales in the Outside North America Off-Highway end market declined 8.3% year over year to $22 million and also missed the Zacks Consensus Estimate of $29.2 million.
Net sales in the Service Parts, Support Equipment & Other end markets decreased 9% year over year to $166 million in the quarter and also missed the Zacks Consensus Estimate of $171 million.
Financial Position
Allison saw a gross profit of $394 million, which increased from $381 million reported in the year-ago quarter, mainly driven by higher net sales and price increases in certain products.
Adjusted EBITDA in the quarter came in at $301 million, which rose from $288 million reported a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter decreased to $82 million from $92 million reported in the prior-year quarter. Engineering – research and development expenses totaled $49 million compared with $47 million recorded in the corresponding quarter of 2023.
Allison had cash and cash equivalents of $648 million as of Jun 30, 2024, down from $555 million recorded as of Dec 31, 2023. Long-term debt amounted to $2.4 billion compared with $2.5 billion as of Dec 31, 2023.
Net cash provided by operating activities totaled $171 million. Adjusted free cash flow in the reported quarter totaled $150 million, up from $122 million generated in the year-ago period.
Updated 2024 Outlook
Allison now expects full-year 2024 net sales in the band of $3.09-$3.17 billion, up from the previously guided range of $3.05-$3.15 billion. Net income is expected in the band of $650-$700 million, up from the previous guidance of $635-$685 million. Adjusted EBITDA is estimated in the range of $1.085-$1.145 billion, up from the previous outlook of $1.07-$1.13 billion.
ALSN expects net cash provided by operating activities between $715 million and $775 million, up from the previous estimate of $700-$760 million. Capex is expected in the band of $125-$135 million. Adjusted free cash flow is estimated between $590 million and $640 million, up from the previous guidance of $575-$625 million.
Zacks Rank & Other Key Picks
ALSN currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the auto space are Suzuki Motor Corporation (SZKMY - Free Report) , BYD Company Limited (BYDDY - Free Report) and Honda Motor Co., Ltd. (HMC - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for SZKMY’s 2025 earnings suggests year-over-year growth of 2.09%. EPS estimates for 2025 and 2026 have improved 38 cents and 15 cents, respectively, in the past 60 days.
The Zacks Consensus Estimate for BYDDY’s 2024 sales and earnings suggests year-over-year growth of 21.11% and 9.93%, respectively. EPS estimates for 2024 and 2025 have improved 19 cents and 29 cents, respectively, in the past 30 days.
The Zacks Consensus Estimate for HMC’s 2025 sales and earnings suggests year-over-year growth of 0.73%. EPS estimates for 2025 and 2026 have improved 5 cents and 4 cents, respectively, in the past seven days.