Allison Transmission (NYSE:ALSN) Announces Earnings Results

Allison Transmission (NYSE:ALSN) announced its quarterly earnings results on Monday. The auto parts company reported $2.90 earnings per share for the quarter, topping analysts’ consensus estimates of $2.32 by $0.58, FiscalAI reports. The firm had revenue of $1.53 billion for the quarter, compared to the consensus estimate of $1.47 billion. Allison Transmission had a return on equity of 38.18% and a net margin of 12.02%.

Here are the key takeaways from Allison Transmission’s conference call:

• Third-quarter net sales rose 121% year over year to $1.534 billion, including $653 million from the Allison Off-Highway acquisition and a 27% increase in the legacy Allison Transmission business. Adjusted EBITDA increased 56% to $400 million, while adjusted free cash flow rose 51% to $278 million.
• Allison raised its full-year 2026 guidance for revenue, earnings, and cash flow for the second consecutive quarter, now expecting $5.975 billion-$6.075 billion of sales and $850 million-$900 million of adjusted free cash flow. Management expects the Off-Highway acquisition to be accretive to 2026 net income and EPS despite approximately $125 million of one-time pre-tax costs.
• Demand was particularly strong in North American on-highway markets, where quarterly sales reached a record $462 million, up 41% year over year. Management cited pent-up replacement demand in medium-duty trucks, robust Class 8 vocational demand, and a defense order book that is nearly full for 2027.
• The combined company is pursuing an integrated, energy-agnostic propulsion portfolio spanning conventional, hybrid, and electric products, with opportunities to capture more content per vehicle, cross-sell across customers, and generate at least $120 million in identified synergies. Management also sees additional margin opportunities from volume growth, cost reductions, and pricing.
• Raw-material inflation, particularly for steel and aluminum, remains a meaningful margin headwind, while geopolitical uncertainty continues to suppress industrial and agricultural demand in the Off-Highway business. Management also said high-voltage electrification adoption is not accelerating, with current demand concentrated in lower-voltage applications.

Allison Transmission Stock Performance

NYSE ALSN traded up $4.51 on Monday, reaching $112.56. The stock had a trading volume of 1,305,638 shares, compared to its average volume of 915,693. The company has a debt-to-equity ratio of 2.07, a current ratio of 1.81 and a quick ratio of 1.17. The company has a market cap of $9.29 billion, a P/E ratio of 17.89, a price-to-earnings-growth ratio of 0.57 and a beta of 0.98. The firm has a fifty day moving average of $117.78 and a two-hundred day moving average of $118.28. Allison Transmission has a 1-year low of $78.19 and a 1-year high of $137.62.

Allison Transmission Dividend Announcement

The company also recently disclosed a quarterly dividend, which was paid on Monday, August 31st. Shareholders of record on Friday, August 21st were issued a $0.29 dividend. This represents a $1.16 dividend on an annualized basis and a yield of 1.0%. The ex-dividend date of this dividend was Friday, August 21st. Allison Transmission’s dividend payout ratio is currently 18.44%.

Insiders Place Their Bets

In related news, insider Eric C. Scroggins sold 1,050 shares of the firm’s stock in a transaction dated Tuesday, August 11th. The shares were sold at an average price of $125.00, for a total transaction of $131,250.00. Following the transaction, the insider directly owned 16,604 shares of the company’s stock, valued at approximately $2,075,500. This trade represents a 5.95% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CEO David S. Graziosi sold 26,708 shares of the firm’s stock in a transaction dated Friday, August 21st. The stock was sold at an average price of $132.97, for a total transaction of $3,551,362.76. Following the transaction, the chief executive officer directly owned 304,843 shares in the company, valued at approximately $40,534,973.71. This represents a 8.06% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 1.10% of the stock is currently owned by company insiders.

Wall Street Analysts Forecast Growth

Several research analysts have recently commented on the company. Zacks Research upgraded Allison Transmission from a “hold” rating to a “strong-buy” rating in a research note on Monday, October 5th. Wells Fargo & Company reduced their price objective on shares of Allison Transmission from $137.00 to $120.00 and set an “equal weight” rating for the company in a research report on Thursday, October 8th. Morgan Stanley upped their price objective on shares of Allison Transmission from $126.00 to $130.00 and gave the company an “equal weight” rating in a report on Friday, July 17th. JPMorgan Chase & Co. decreased their price objective on shares of Allison Transmission from $145.00 to $142.00 and set a “neutral” rating on the stock in a report on Thursday, October 8th. Finally, Citigroup raised shares of Allison Transmission from a “neutral” rating to a “buy” rating and set a $135.00 price objective on the stock in a research report on Monday, October 12th. Two analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and three have assigned a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $131.57.

About Allison Transmission

Allison Transmission, Inc designs and manufactures propulsion solutions for commercial, defense and off-highway vehicles. The company is best known for its fully automatic transmissions, which are used in applications including refuse collection, construction, distribution, emergency services, public transportation and mining.

Its product portfolio also includes electric and hybrid-electric propulsion systems, including the eGen Power electric axle and other electrification technologies.