Allison to Report Q2 Earnings: What's in Store for the Stock?

Core Viewpoint - Allison Transmission Holdings, Inc. is expected to report second-quarter 2025 results on August 4, with sales and earnings estimates of $794.43 million and $2.20 per share respectively [1][8] Financial Performance - The earnings projection indicates a year-over-year increase of 3.29%, while the revenue estimate suggests a decline of 2.64% compared to the previous year [2] - In the first quarter of 2025, Allison reported adjusted 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 consensus estimate of $775 million [2] Market Demand and Outlook - Strong demand for Class 8 vocational vehicles in the North America On-Highway market is driving revenue growth, with expectations to continue this trend into 2025. The company anticipates adjusted EBITDA between $1.17 billion and $1.23 billion for 2025, an increase from $1.165 billion in 2024, and net income projected between $735 million and $785 million, up from $731 million in 2024 [3] R&D and Cost Pressures - The company's electrified propulsion initiatives are expected to increase spending levels, impacting cash flows. R&D costs rose approximately 3% year-over-year in 2024 due to higher spending on product initiatives, and further increases in R&D expenses are anticipated in 2025 [4] Earnings Prediction - The current model does not predict an earnings beat for Allison in the upcoming quarter, as it lacks the necessary combination of positive Earnings ESP and a favorable Zacks Rank [5] - Allison has an Earnings ESP of -0.41% and currently holds a Zacks Rank of 3 [6]