Allison(US:ALSN) ZACKS·2025-10-30 15:36Core Insights - Allison Transmission Holdings (ALSN) reported Q3 2025 earnings of $1.63 per share, missing the Zacks Consensus Estimate of $1.95 and declining 28% year over year. Quarterly revenues were $693 million, down 16% from the previous year and also below the Zacks Consensus Estimate of $756 million [1][10]. Segment Performance - Net sales in the North America On-Highway end market decreased by 28% year over year to $327 million, missing the Zacks Consensus Estimate of $368 million, primarily due to soft demand for Class 8 vocational and medium-duty trucks [2]. - Outside North America, net sales in the On-Highway end market were $122 million, a decline of 3% from the same quarter in 2024, missing the Zacks Consensus Estimate of $130.83 million due to lower demand in Asia [3]. - Global Off-Highway end market net sales fell to $7 million from $20 million in the prior year, missing the Zacks Consensus Estimate of $17.77 million, attributed to weaker demand from the energy, mining, and construction sectors outside North America [3]. - The Defense end market saw a 47% year-over-year increase in net sales to $78 million, driven by higher demand for tracked vehicle applications and price increases, surpassing the Zacks Consensus Estimate of $60 million [4]. - Net sales in the Service Parts, Support Equipment & Other end markets decreased by 5% year over year to $159 million, missing the Zacks Consensus Estimate of $169 million due to lower demand for aluminum die cast components and support equipment [5]. Financial Position - Gross profit for the quarter was $329 million, down from $396 million in the previous year due to lower volumes and unfavorable direct material costs [6]. - Adjusted EBITDA was $256 million, a decrease from $305 million reported a year ago [6]. - Selling, general and administrative expenses were $82 million, down 4% year over year, while engineering, research, and development expenses decreased to $43 million from $51 million [7]. - Cash and cash equivalents stood at $902 million as of September 30, 2025, an increase from $781 million at the end of 2024. Long-term debt remained unchanged at $2.39 billion [7]. - Net cash provided by operating activities totaled $228 million, with adjusted free cash flow at $184 million, down from $210 million generated a year ago [8]. 2025 Outlook - The company revised its full-year 2025 outlook, now expecting net sales between $2.975 billion and $3.025 billion, down from the previous projection of $3.075 billion to $3.175 billion. Net income is anticipated in the range of $620 million to $650 million, compared to the prior estimate of $640 million to $680 million [11]. - Adjusted EBITDA is now expected to be between $1.09 billion and $1.13 billion, down from the previous estimate of $1.13 billion to $1.18 billion [11]. - Net cash provided by operating activities is projected to be between $765 million and $795 million, with capital expenditures estimated at $165 million to $175 million. Adjusted free cash flow is now expected to be between $600 million and $620 million, down from the previous range of $620 million to $660 million [12].