Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.52 a share, which topped the Zacks Consensus Estimate of $1.21 owing to higher-than-anticipated sales from North America On-Highway, North America Off-Highway, Defense, Outside North America On-Highway and Service Parts, Support Equipment & Other end markets. The bottom line increased 32% on a year-over-year basis from $1.15 per share. Quarterly revenues of $718 million grew 11% from the year-ago period and crossed the consensus mark of $676 million.
Segmental Performance
Allison segregates revenues in terms of end markets served, which are as follows:
In the reported quarter, net sales in the North America On-Highway end market jumped 19% year over year to $333 million amid continued robust customer demand for last-mile delivery, regional haul and vocational trucks. Also, the metric surpassed the Zacks Consensus Estimate of $327 million.
Net sales in the North America Off-Highway end market declined 11% to $24 million from the year-ago period but crossed the Zacks Consensus Estimate of $23.96 million.
In the reported quarter, net sales in the Defense end market declined 13% year over year to $47 million. However, the figure topped the consensus estimate of $41.15 million.
The Outside North America On-Highway end market’s net sales rose 24% year over year to $131 million in the quarter, led by improved demand in Europe, Asia and South America and outpaced the consensus mark of $105 million.
Net sales in the Outside North America Off-Highway end market declined 17% year over year to $29 million and lagged the consensus mark of $31.5 million.
Net sales in the Service Parts, Support Equipment & Other end markets rose 9% year over year to $154 million in the quarter, owing to higher demand for global service parts and support equipment and aluminum die-cast components. Moreover, the figure crossed the consensus mark of $142 million.
Financial Position
Allison saw a gross profit of $338 million, an 11% increase from $305 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Adjusted EBITDA in the quarter came in at $245 million, an increase of 11% from $220 million a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter increased to $97 million from $79 million for the same period in 2021, driven by higher commercial activity expenses. Engineering – research and development expenses were $49 million, almost at the same level as the fourth quarter of 2021.
Allison had cash and cash equivalents of $232 million on Dec 31, 2022, up from $127 million as of Dec 31, 2021. Long-term debt was $2,501 million, marginally down from $2,504 million as of Dec 31, 2021.
Net cash provided by operating activities increased to $224 million from $168 million for the same period in 2021, owing to a lower working capital requirement and a higher gross profit. Adjusted free cash flow in the reported quarter was $132 million, an increase from $105 million a year ago due to higher gross profit and higher net cash provided by operating activities.
In the fourth quarter, Allison repurchased $55 million of its common stock.
2023 Outlook
Allison’s full-year 2023 estimated net sales are in the band of $2,825-$2,925 million. Net income is expected in the band of $500-$550 million, and adjusted EBITDA is estimated within $965-$1,025 million. Adjusted free cash flow is estimated within $480-$530 million. Its expected net cash provided by operating activities is between $605 and $665 million. Capex numbers are in the band of $125-$135 million.
Zacks Rank & Key Picks
ALSN currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . While WNC and MOD sport a Zacks Rank #1 (Strong Buy), HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.52 a share, which topped the Zacks Consensus Estimate of $1.21 owing to higher-than-anticipated sales from North America On-Highway, North America Off-Highway, Defense, Outside North America On-Highway and Service Parts, Support Equipment & Other end markets. The bottom line increased 32% on a year-over-year basis from $1.15 per share. Quarterly revenues of $718 million grew 11% from the year-ago period and crossed the consensus mark of $676 million.
Segmental Performance
Allison segregates revenues in terms of end markets served, which are as follows:
In the reported quarter, net sales in the North America On-Highway end market jumped 19% year over year to $333 million amid continued robust customer demand for last-mile delivery, regional haul and vocational trucks. Also, the metric surpassed the Zacks Consensus Estimate of $327 million.
Net sales in the North America Off-Highway end market declined 11% to $24 million from the year-ago period but crossed the Zacks Consensus Estimate of $23.96 million.
In the reported quarter, net sales in the Defense end market declined 13% year over year to $47 million. However, the figure topped the consensus estimate of $41.15 million.
The Outside North America On-Highway end market’s net sales rose 24% year over year to $131 million in the quarter, led by improved demand in Europe, Asia and South America and outpaced the consensus mark of $105 million.
Net sales in the Outside North America Off-Highway end market declined 17% year over year to $29 million and lagged the consensus mark of $31.5 million.
Net sales in the Service Parts, Support Equipment & Other end markets rose 9% year over year to $154 million in the quarter, owing to higher demand for global service parts and support equipment and aluminum die-cast components. Moreover, the figure crossed the consensus mark of $142 million.
Financial Position
Allison saw a gross profit of $338 million, an 11% increase from $305 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Adjusted EBITDA in the quarter came in at $245 million, an increase of 11% from $220 million a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter increased to $97 million from $79 million for the same period in 2021, driven by higher commercial activity expenses. Engineering – research and development expenses were $49 million, almost at the same level as the fourth quarter of 2021.
Allison had cash and cash equivalents of $232 million on Dec 31, 2022, up from $127 million as of Dec 31, 2021. Long-term debt was $2,501 million, marginally down from $2,504 million as of Dec 31, 2021.
Net cash provided by operating activities increased to $224 million from $168 million for the same period in 2021, owing to a lower working capital requirement and a higher gross profit. Adjusted free cash flow in the reported quarter was $132 million, an increase from $105 million a year ago due to higher gross profit and higher net cash provided by operating activities.
In the fourth quarter, Allison repurchased $55 million of its common stock.
2023 Outlook
Allison’s full-year 2023 estimated net sales are in the band of $2,825-$2,925 million. Net income is expected in the band of $500-$550 million, and adjusted EBITDA is estimated within $965-$1,025 million. Adjusted free cash flow is estimated within $480-$530 million. Its expected net cash provided by operating activities is between $605 and $665 million. Capex numbers are in the band of $125-$135 million.
Zacks Rank & Key Picks
ALSN currently has a Zacks Rank #3 (Hold).
A few better-ranked players in the auto space include Wabash National (WNC - Free Report) , Modine Manufacturing (MOD - Free Report) and Hyliion (HYLN - Free Report) . While WNC and MOD sport a Zacks Rank #1 (Strong Buy), HYLN carries a Zacks Rank #2 (Buy).
Wabash is one of the leading manufacturers of semi-trailers in North America. The Zacks Consensus Estimate for WNC’s 2023 sales and earnings implies year-over-year growth of 13.06% and 24%, respectively.
Modine designs and manufactures world-class thermal dynamic equipment for today's agricultural, mining & construction equipment. The Zacks Consensus Estimate for MOD’s 2023 sales and earnings implies year-over-year growth of 11.43% and 43.09%, respectively.
Hyliion provides electrified powertrain solutions for Class 8 commercial vehicles. The Zacks Consensus Estimate for HYLN’s 2023 sales implies year-over-year growth of 538.07%.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Get the latest research report on ALSN - FREE
Get the latest research report on WNC - FREE
Get the latest research report on MOD - FREE
Get the latest research report on HYLN - FREE