Accessibility StatementSkip Navigation MAUMEE, Ohio and INDIANAPOLIS, Nov. 19, 2025 /PRNewswire/ -- Dana Incorporated (NYSE: DAN) and Allison Transmission Holdings, Inc. (NYSE: ALSN) today announced that all required regulatory approvals related to the previously announced sale of Dana's Off-Highway business to Allison have been received. The parties intend to close the transaction at or near the end of this year. "This milestone marks a significant step forward in our transformation strategy," said R. Bru ...

Core Points - Allison Transmission Holdings, Inc. announced a private placement of $500 million in 5.875% Senior Notes due 2033 and a $1,200 million senior secured incremental term loan facility [1][2] - The proceeds from these offerings will be used to finance the acquisition of Dana Incorporated's off-highway business and cover related expenses [1] - The Notes Offering is expected to close around November 21, 2025, while the Incremental Term Loan Facility will close concurrently with the Dana Business Acquisition [1] Financial Details - The Notes will bear an interest rate of 5.875% and the Incremental Term Loan Facility will have an interest rate of Term SOFR plus 1.75% [1] - The total amount of the Incremental Term Loan Facility is $1,200 million [1] Company Overview - Allison Transmission is a leading designer and manufacturer of propulsion solutions for commercial and defense vehicles, and the largest global manufacturer of medium- and heavy-duty fully automatic transmissions [5] - The company operates in over 150 countries and has manufacturing facilities in the USA, Hungary, and India [5] - Founded in 1915, Allison Transmission is headquartered in Indianapolis, Indiana [5]

Core Insights - Allison Transmission Holdings Inc. reported third quarter net sales of $693 million, a decrease from $824 million in the same period last year, primarily driven by challenges in the North America On-Highway market and growth in the Defense sector [1][3][4]. Financial Performance - Net income for the quarter was $137 million, down from $200 million year-over-year, with diluted EPS at $1.63 [3][8]. - Adjusted EBITDA for the quarter was $256 million, reflecting a margin of 36.9% despite a challenging demand environment [3][14]. - Net cash provided by operating activities was $228 million, a decrease from $246 million in the previous year [3][9]. Sales Breakdown by End Market - North America On-Highway sales decreased by $130 million to $327 million [4][15]. - Defense sales increased by $25 million to $78 million, marking a 47% year-over-year growth [4][15]. - Global Off-Highway sales fell by $13 million to $7 million, while Outside North America On-Highway sales decreased by $4 million [4][15]. Cost and Expense Management - Gross profit for the quarter was $329 million, down from $396 million, primarily due to lower volumes and unfavorable direct material costs [5]. - Selling, general and administrative expenses decreased to $82 million from $85 million, driven by lower incentive compensation and commercial activities spending [6]. - Engineering research and development expenses were $43 million, down from $51 million, reflecting reduced spending on product initiatives [7]. Guidance Update - The company revised its full-year 2025 guidance, expecting net sales between $2,975 million and $3,025 million, and net income in the range of $620 million to $650 million [10][11].

Allison Transmission Holdings, Inc. (NYSE:ALSN) is one of the most profitable manufacturing stocks to buy now. On October 14, 2025, analyst Tami Zakaria at J.P. Morgan Chase & Co. maintained a Neutral rating on Allison Transmission but trimmed the 12‑month price target from $95 to $90. The rationale reflects broader industrial caution: the machinery/waste‑services segment tends to lag following the first rate cut by the Federal Reserve, and renewed tariffs on Chinese goods may dent the company’s Q4 perfo ...

Industry Overview - The Zacks Automotive - Original Equipment industry involves the design, manufacture, and distribution of automotive equipment components essential for vehicle production, including drive axles, engine parts, and brakes [2] - Demand for original equipment is closely tied to vehicle sales, which depend on economic growth and consumer confidence [2] - Globalization is creating new opportunities for auto-equipment manufacturers, necessitating adaptation through research and development [2] Key Themes Defining the Industry's Fate - U.S. auto sales are projected to decline, with May 2025 sales estimated at 1.47 million units, leading to a seasonally adjusted annual rate of 15.7 million, down from 17.6 million in March and April [3] - The shift towards electric and autonomous vehicles is reshaping the industry, requiring component suppliers to innovate in areas like batteries and sensors [4] - Rising costs associated with R&D and production are critical challenges, necessitating effective cost management to protect margins [5] Current Industry Performance - The Zacks Automotive - Original Equipment industry ranks 146, placing it in the bottom 40% of approximately 250 Zacks industries, indicating weak near-term prospects [6][7] - The industry's earnings estimates have declined by 9% year-to-date, reflecting a negative outlook for earnings growth [8] - Over the past year, the industry has underperformed the broader Auto sector and the S&P 500, losing 10% compared to the sector's 15% and the S&P 500's 12% growth [9] Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 18.43X, higher than the S&P 500's 16.65X but lower than the sector's 21.93X [12] - Historically, the industry has traded between 5.89X and 23.79X over the past five years, with a median of 13.50X [13] Stocks to Watch - **Strattec Security**: A key supplier of automotive access and security solutions, with strong demand and cost-cutting measures expected to save $5 million annually [17][18] - **Luminar Technologies**: Focused on LiDAR sensors for self-driving cars, with a new platform expected to launch in late 2026 or early 2027, and strong financial positioning with $400 million in liquidity [22][23] - **Allison Transmission**: Specializes in automatic transmissions for commercial trucks, benefiting from rising defense spending and strong demand in North America, with a recent 8% dividend increase [27][28]

Core Viewpoint - The Zacks Automotive - Original Equipment Industry faces significant uncertainty due to tariffs imposed by the Trump administration and an expected decline in light vehicle production, which is likely to reduce demand for auto equipment. However, companies like American Axle & Manufacturing Holdings, Inc., Allison Transmission Holdings, Inc., and Adient plc are leveraging international presence, acquisitions, and technological advancements to navigate these challenges [1][4]. Industry Description - The Zacks Automotive - Original Equipment Industry includes companies that design and produce passive safety systems, driveline, and metal forming technologies for electric, hybrid, and internal combustion vehicles. The industry also provides equipment to the U.S. government and major car manufacturers, and some companies offer equipment financing and leasing solutions [2]. Factors Shaping Industry Prospects - **Import Tariffs**: The Trump administration's protectionist policies impose tariffs of up to 25% on non-U.S.-based auto equipment manufacturers, which could negatively impact their profits and encourage investment in U.S.-based manufacturing [3]. - **Decline in Light Vehicle Production**: Light vehicle output is projected to decline by 1.8% year-over-year in Q1 2025 and 0.5% for the full year, which is expected to reduce demand for auto equipment and affect companies' revenues [4]. - **Technological Advancements**: Automation is enhancing efficiency and reducing labor costs in manufacturing, allowing companies to remain competitive and respond quickly to market changes [5]. Industry Performance - The Zacks Automotive - Original Equipment Industry ranks 148, placing it in the bottom 40% of over 250 Zacks industries, indicating dim near-term prospects [6][7]. - The industry's earnings estimates for 2025 and 2026 have decreased by 26.40% and 19.80%, respectively, over the past year, reflecting a negative outlook [8]. Market Performance - The industry has underperformed the S&P 500, declining by 11.7% over the past year compared to the S&P 500's growth of 15.1% and the broader sector's decline of 1.4% [11]. Current Valuation - The industry is currently trading at an EV/EBITDA ratio of 19.25X, higher than the S&P 500's 17.27X and the sector's 18.69X. Over the past five years, the industry has traded between 4X and 22.09X, with a median of 12.69X [13][14]. Notable Companies - **American Axle & Manufacturing Holdings, Inc. (AXL)**: A leading supplier of driveline systems, focusing on electrification and optimizing its portfolio through acquisitions. The Zacks Consensus Estimate for 2025 EPS implies a year-over-year growth of 13.92% [18][19]. - **Allison Transmission Holdings, Inc. (ALSN)**: A manufacturer of automatic transmissions, expanding into new markets and focusing on advanced technology. The Zacks Consensus Estimate for 2025 sales and EPS implies year-over-year growth of 1.53% and 6.26%, respectively [21][22]. - **Adient plc (ADNT)**: A major automotive seating supplier, focusing on automation and modularity to enhance efficiency. The Zacks Consensus Estimate for 2026 sales and EPS implies year-over-year growth of 1.71% and 43.08%, respectively [23][24].