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Allison (ALSN) Q4 Earnings Beat Estimates, Sales Up Y/Y
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Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.15 a share, which beat the Zacks Consensus Estimate of 92 cents owing to higher-than-anticipated contribution from all segments except the North America On-Highway end market. The bottom line also increased 117% on a year-over-year basis. Quarterly revenues of $644 million grew 20.4% from the year-ago period and surpassed the consensus mark of $596.9 million.
Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise
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 inched down 1% year over year to $281 million amid lower demand owing to supply disruptions and raw material constraints. The metric also missed the Zacks Consensus Estimate of $294 million.
Net sales in the North America Off-Highway end market skyrocketed to $27 million from $1 million recorded in the year-ago period on higher demand for hydraulic fracturing applications. The metric also surpassed the Zacks Consensus Estimate of $16.5 million.
In the fourth quarter, net sales in the Defense end market expanded 23% year over year to $54 million. The figure also topped the consensus estimate of $41.8 million.
The Outside North America On-Highway end market’s net sales surged 38% year over year to $106 million in the quarter, courtesy of growth initiatives and recovery of customer demand from pandemic-related disruptions in the corresponding period of 2020. The metric also beat the consensus mark of $93 million.
Net sales in the Outside North America Off-Highway end market skyrocketed 218% year over year to $35 million on higher demand from energy, mining and construction sectors. The metric outpaced the consensus mark of $16.93 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 19% year over year to $141 million in the quarter owing to higher demand for global service parts and support equipment. Moreover, the figure crossed the consensus mark of $134 million.
Financial Position
Allison had cash and cash equivalents of $127 million on Dec 31, 2021, compared with $310 million as of 2020-end. Long-term debt was $2,504 million, marginally down from $2,507 million. Adjusted free cash flow in the reported quarter was $105 million, down from the prior-year quarter’s $128 million on increased capital expenditures.
Selling, general and administrative expenses fell marginally to $79 million from $80 million. Engineering – research and development expenses in the quarter increased to $50 million from $40 million in the year-ago quarter, primarily driven by increased product initiatives spending.
In 2021, the company settled more than $500 million of share repurchases, representing 12% of shares outstanding as of Dec 31, 2020.
2022 Outlook
For 2022, Allison expects a demand boost in the Global On-Highway, Global Off-Highway and Service Parts, Support Equipment & Other end markets led by the ongoing global economic revival, strength in customer demand and price hike on certain products. It projects net sales in the band of $2,625-$2,775 million. Net income and adjusted EBITDA are envisioned in the band of $430-$520 million and $865-$975 million, respectively. Adjusted free cash flow is expected within $400-$500 million. ALSN expects to generate $570-$680 million in net cash provided by operating activities. Capex is forecast in the band of $170-$180 million.
Tesla has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 22.3% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has also rallied 11.3% over a year.
Dorman has an expected earnings growth rate of 15.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 0.2% upward in the past 60 days.
Dorman’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met the consensus mark in one. DORM pulled off a trailing four-quarter earnings surprise of 10.41%, on average. The stock has also rallied 1.4% over a year.
SMP Motor has an expected earnings growth rate of 5.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 0.2% upward in the past 60 days.
SMP Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 67.27%, on average. The stock has also rallied 17.2% over a year.
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Allison (ALSN) Q4 Earnings Beat Estimates, Sales Up Y/Y
Allison Transmission Holdings (ALSN - Free Report) posted fourth-quarter earnings of $1.15 a share, which beat the Zacks Consensus Estimate of 92 cents owing to higher-than-anticipated contribution from all segments except the North America On-Highway end market. The bottom line also increased 117% on a year-over-year basis. Quarterly revenues of $644 million grew 20.4% from the year-ago period and surpassed the consensus mark of $596.9 million.
Allison Transmission Holdings, Inc. Price, Consensus and EPS Surprise
Allison Transmission Holdings, Inc. price-consensus-eps-surprise-chart | Allison Transmission Holdings, Inc. Quote
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 inched down 1% year over year to $281 million amid lower demand owing to supply disruptions and raw material constraints. The metric also missed the Zacks Consensus Estimate of $294 million.
Net sales in the North America Off-Highway end market skyrocketed to $27 million from $1 million recorded in the year-ago period on higher demand for hydraulic fracturing applications. The metric also surpassed the Zacks Consensus Estimate of $16.5 million.
In the fourth quarter, net sales in the Defense end market expanded 23% year over year to $54 million. The figure also topped the consensus estimate of $41.8 million.
The Outside North America On-Highway end market’s net sales surged 38% year over year to $106 million in the quarter, courtesy of growth initiatives and recovery of customer demand from pandemic-related disruptions in the corresponding period of 2020. The metric also beat the consensus mark of $93 million.
Net sales in the Outside North America Off-Highway end market skyrocketed 218% year over year to $35 million on higher demand from energy, mining and construction sectors. The metric outpaced the consensus mark of $16.93 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 19% year over year to $141 million in the quarter owing to higher demand for global service parts and support equipment. Moreover, the figure crossed the consensus mark of $134 million.
Financial Position
Allison had cash and cash equivalents of $127 million on Dec 31, 2021, compared with $310 million as of 2020-end. Long-term debt was $2,504 million, marginally down from $2,507 million. Adjusted free cash flow in the reported quarter was $105 million, down from the prior-year quarter’s $128 million on increased capital expenditures.
Selling, general and administrative expenses fell marginally to $79 million from $80 million. Engineering – research and development expenses in the quarter increased to $50 million from $40 million in the year-ago quarter, primarily driven by increased product initiatives spending.
In 2021, the company settled more than $500 million of share repurchases, representing 12% of shares outstanding as of Dec 31, 2020.
2022 Outlook
For 2022, Allison expects a demand boost in the Global On-Highway, Global Off-Highway and Service Parts, Support Equipment & Other end markets led by the ongoing global economic revival, strength in customer demand and price hike on certain products. It projects net sales in the band of $2,625-$2,775 million. Net income and adjusted EBITDA are envisioned in the band of $430-$520 million and $865-$975 million, respectively. Adjusted free cash flow is expected within $400-$500 million. ALSN expects to generate $570-$680 million in net cash provided by operating activities. Capex is forecast in the band of $170-$180 million.
Zacks Rank & Other Key Picks
Currently, ALSN has a Zacks Rank #2 (Buy).
Other top-ranked players in the auto space include Tesla (TSLA - Free Report) , sporting a Zacks Rank #1(Strong Buy) and Dorman Products (DORM - Free Report) and Standard Motor Products (SMP - Free Report) , each carrying a Zacks Rank #2 currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tesla has an expected earnings growth rate of 40.7% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 22.3% upward in the past 60 days.
Tesla’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. TSLA pulled off a trailing four-quarter earnings surprise of 33.3%, on average. The stock has also rallied 11.3% over a year.
Dorman has an expected earnings growth rate of 15.9% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 0.2% upward in the past 60 days.
Dorman’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and met the consensus mark in one. DORM pulled off a trailing four-quarter earnings surprise of 10.41%, on average. The stock has also rallied 1.4% over a year.
SMP Motor has an expected earnings growth rate of 5.5% for the current year. The Zacks Consensus Estimate for current-year earnings has been revised around 0.2% upward in the past 60 days.
SMP Motor’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. SMP pulled off a trailing four-quarter earnings surprise of 67.27%, on average. The stock has also rallied 17.2% over a year.