Allison Transmission Q1 Earnings Top Estimates, Sales Miss

Core Viewpoint - Allison Transmission Holdings reported first-quarter 2024 earnings of $2.23 per share, exceeding the Zacks Consensus Estimate of $1.97 and reflecting a 17% year-over-year increase. However, quarterly revenues of $766 million fell 3% from the previous year and missed the Zacks Consensus Estimate of $775 million [1]. Segmental Performance - In the North America On-Highway end market, net sales increased by 3.5% year over year to $435 million, surpassing the Zacks Consensus Estimate of $406 million, driven by high demand for Class 8 vocational vehicles and price increases [2]. - The Outside North America On-Highway end market saw net sales decrease to $112 million from $115 million in the same quarter of 2024, missing the Zacks Consensus Estimate of $117 million due to lower demand in Europe [3]. - Global Off-Highway end market net sales plummeted to $18 million from $46 million year over year, missing the Zacks Consensus Estimate of $25.83 million, attributed to reduced demand from energy, mining, and construction sectors outside North America [4]. - Net sales in the Defense end market rose 10% year over year to $53 million, slightly missing the Zacks Consensus Estimate of $54 million, supported by better pricing [4]. - Service Parts, Support Equipment & Other end markets experienced a 7.5% year-over-year contraction in net sales to $159 million, although this figure exceeded the Zacks Consensus Estimate of $148 million due to price increases [5]. Financial Position - The company reported a gross profit of $378 million, up from $366 million in the previous year, primarily driven by price increases [6]. - Adjusted EBITDA for the quarter was $287 million, a slight decline from $289 million reported a year ago [6]. - Selling, general and administrative expenses remained flat year over year at $86 million, while engineering research and development expenses decreased to $43 million from $46 million [7]. - As of March 31, 2025, cash and cash equivalents totaled $753 million, down from $781 million at the end of 2024, with long-term debt remaining unchanged at $2.4 billion [7]. - Net cash provided by operating activities was $181 million, and adjusted free cash flow totaled $155 million, down from $162 million in the previous year [8]. 2025 Outlook - For full-year 2025, Allison Transmission expects net sales to be in the range of $3.2 billion to $3.3 billion, compared to $3.23 billion in 2024. Net income is projected between $735 million and $785 million, up from $731 million in 2024 [9]. - Adjusted EBITDA is estimated to be between $1.17 billion and $1.23 billion, an increase from $1.16 billion reported in 2024 [9]. - The company anticipates net cash provided by operating activities to be between $800 million and $860 million, with capital expenditures expected in the range of $165 million to $175 million. Adjusted free cash flow is projected to be between $635 million and $685 million, compared to $658 million in 2024 [10].