Why Is Allison Transmission (ALSN) Up 1.6% Since Last Earnings Report?

Core Viewpoint - Allison Transmission's recent earnings report shows mixed results, with earnings per share beating estimates but revenues slightly declining year over year, raising questions about future performance [3][12]. Financial Performance - Q2 2025 earnings were $2.29 per share, exceeding the Zacks Consensus Estimate of $2.20, and reflecting a 7.5% increase year over year [3]. - Quarterly revenues totaled $814 million, a decrease of 0.2% from the previous year but above the Zacks Consensus Estimate of $794 million [3]. - Gross profit increased to $402 million from $394 million year over year, driven by price increases on certain products [8]. - Adjusted EBITDA rose to $313 million from $301 million reported a year ago [8]. Segmental Performance - North America On-Highway net sales fell 8.6% year over year to $417 million, missing the Zacks Consensus Estimate of $442 million due to lower demand for medium-duty trucks [4]. - Outside North America On-Highway net sales increased to $142 million from $128 million year over year, surpassing the Zacks Consensus Estimate of $123 million [5]. - Global Off-Highway net sales dropped to $16 million from $23 million year over year, missing the Zacks Consensus Estimate of $18.45 million [6]. - Defense end market net sales rose 46.5% year over year to $63 million, exceeding the Zacks Consensus Estimate of $52 million [6]. - Service Parts, Support Equipment & Other net sales grew 6% year over year to $176 million, beating the Zacks Consensus Estimate of $162 million [7]. Financial Position - Selling, general and administrative expenses increased by 24.4% year over year to $102 million [9]. - Cash and cash equivalents were $778 million as of June 30, 2025, down from $781 million at the end of 2024 [9]. - Long-term debt remained unchanged at $2.4 billion [9]. - Net cash provided by operating activities totaled $184 million, with adjusted free cash flow at $153 million, up from $150 million year over year [10]. 2025 Outlook - Full-year 2025 net sales are now expected to be between $3,075 million and $3,175 million, down from the previous estimate of $3,200 million to $3,300 million [12]. - Expected net income is revised to a range of $640 million to $680 million, down from $735 million to $785 million [12]. - Adjusted EBITDA is estimated to be between $1,130 million and $1,180 million, reduced from the earlier expectation of $1,170 million to $1,230 million [12]. - The company anticipates net cash provided by operating activities to be between $785 million and $835 million, down from the previous estimate of $800 million to $860 million [13]. Market Sentiment - There has been a downward trend in estimates revisions, with the consensus estimate shifting down by 12.88% [14]. - Allison Transmission currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of below-average returns in the coming months [16].