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Allison Transmission Q2 Earnings Beat Estimates, Guidance Updated
ZACKSยท 2025-08-13 17:41
Core Insights - Allison Transmission Holdings (ALSN) reported Q2 2025 earnings of $2.29 per share, exceeding the Zacks Consensus Estimate of $2.20 and reflecting a 7.5% year-over-year increase. Quarterly revenues reached $814 million, a slight decline of 0.2% from the previous year but surpassing the Zacks Consensus Estimate of $794 million [1]. Segmental Performance - In the North America On-Highway end market, net sales decreased by 8.6% year-over-year to $417 million, falling short of the Zacks Consensus Estimate of $442 million due to reduced demand for medium-duty trucks [2]. - The Outside North America On-Highway end market saw net sales rise to $142 million from $128 million in the same quarter of 2024, driven by increased demand in South America and Europe, and exceeded the Zacks Consensus Estimate of $123 million [2]. - Global Off-Highway end market net sales dropped to $16 million from $23 million year-over-year, missing the Zacks Consensus Estimate of $18.45 million due to weaker demand from energy, mining, and construction sectors outside North America [3]. - The Defense end market experienced a significant increase in net sales, rising 46.5% year-over-year to $63 million, driven by focused growth initiatives, and also surpassed the Zacks Consensus Estimate of $52 million [3]. - Net sales in the Service Parts, Support Equipment & Other end markets grew by 6% year-over-year to $176 million, attributed to higher demand for service parts and price increases, beating the Zacks Consensus Estimate of $162 million [4]. Financial Position - Gross profit for Allison Transmission was $402 million, up from $394 million in the previous year, primarily due to price increases on certain products [5]. - Adjusted EBITDA for the quarter was $313 million, an increase from $301 million reported a year ago [5]. - Selling, general and administrative expenses rose by 24.4% year-over-year to $102 million, while engineering and R&D expenses decreased to $44 million from $49 million [6]. - As of June 30, 2025, cash and cash equivalents stood at $778 million, a slight decrease from $781 million at the end of 2024, with long-term debt remaining unchanged at $2.4 billion [6]. - Net cash provided by operating activities totaled $184 million, and adjusted free cash flow was $153 million, up from $150 million in the previous year [7]. 2025 Outlook - The company revised its full-year 2025 net sales guidance to a range of $3,075-$3,175 million, down from the previous estimate of $3,200-$3,300 million. Net income expectations were also lowered to $640-$680 million from $735-$785 million [8]. - Adjusted EBITDA is now estimated to be between $1,130-$1,180 million, down from the earlier forecast of $1,170-$1,230 million [8]. - Expected net cash provided by operating activities is now between $785 million and $835 million, compared to the previous estimate of $800-$860 million, with capital expenditures projected in the range of $165-$175 million [9][10].