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Allison (ALSN) Beats on Q1 Earnings & Sales, Hikes Dividend
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Allison Transmission Holdings (ALSN - Free Report) posted first-quarter earnings of $1.30 a share, which beat the Zacks Consensus Estimate of $1.16 owing to higher-than-anticipated sales from all segments except Defense end market. The bottom line also increased 21.5% on a year-over-year basis. Quarterly revenues of $677 million grew 15.1% from the year-ago period and surpassed the consensus mark of $642 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 jumped 8% year over year to $346 million amid continued robust customer demand for last mile delivery, regional haul and vocational trucks. The metric also topped the Zacks Consensus Estimate of $333 million.
Net sales in the North America Off-Highway end market catapulted 800% to $18 million from $2 million recorded in the year-ago period. The metric marginally outpaced the Zacks Consensus Estimate of $17.5 million.
In the first quarter, net sales in the Defense end market contracted 22% year over year to $35 million. The figure also lagged the consensus estimate of $41.4 million.
The Outside North America On-Highway end market’s net sales surged 30% year over year to $109 million in the quarter, courtesy of growth initiatives and recovery of customer demand in all regions. The figure also beat the consensus mark of $98 million.
Net sales in the Outside North America Off-Highway end market boomed 88% year over year to $30 million. The metric outpaced the consensus mark of $24 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 14% year over year to $139 million in the quarter, owing to higher demand for North America service parts and global support equipment. Moreover, the figure crossed the consensus mark of $133 million.
Financial Position
Allison saw gross profit of $320 million, a 10% increase from $291 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Allison had cash and cash equivalents of $145 million on Mar 31, 2022, falling from $295 million as of 2021-end. Long-term debt was $2,503 million, marginally down from $2,504 million as of Dec 31, 2021. Adjusted free cash flow in the reported quarter was $143 million, up from the prior-year quarter’s $107 million on higher net cash provided by operating activities and lower capital expenditures. Selling, general and administrative expenses rose to $75 million from $73 million. Engineering – research and development expenses in the quarter increased to $43 million from $38 million in the year-ago quarter, primarily driven by higher product initiatives spending.
In the first quarter, Allison settled more than $81 million of share repurchases, representing 2% of shares. It increased the quarterly dividend for the third consecutive year, from 19 cents to 21 cents per share. In February, the company approved a $1 billion increase to its stock repurchase authorization, taking the total amount authorized under the program to $4 billion.
2022 Outlook
For 2022, Allison reaffirmed that it 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 in certain products. Hence, it kept its 2022 projections unchanged. Its estimated net sales remain in the band of $2,625-$2,775 million. Net income and adjusted EBITDA are unchanged in the band of $430-$520 million and $865-$975 million, respectively. Adjusted free cash flow remains constant within $400-$500 million. It maintains its expected net cash provided by operating activities within $570-$680 million. Capex numbers are unchanged in the band of $170-$180 million.
BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.
BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 12.5% over the past year.
Dorman Products has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.7% upwards in the past 60 days.
Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 2% over the past year.
The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 1.1% upward in the past 60 days.
Standard 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 60.5%, on average. The stock has declined 2.2% over the past year.
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Allison (ALSN) Beats on Q1 Earnings & Sales, Hikes Dividend
Allison Transmission Holdings (ALSN - Free Report) posted first-quarter earnings of $1.30 a share, which beat the Zacks Consensus Estimate of $1.16 owing to higher-than-anticipated sales from all segments except Defense end market. The bottom line also increased 21.5% on a year-over-year basis. Quarterly revenues of $677 million grew 15.1% from the year-ago period and surpassed the consensus mark of $642 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 jumped 8% year over year to $346 million amid continued robust customer demand for last mile delivery, regional haul and vocational trucks. The metric also topped the Zacks Consensus Estimate of $333 million.
Net sales in the North America Off-Highway end market catapulted 800% to $18 million from $2 million recorded in the year-ago period. The metric marginally outpaced the Zacks Consensus Estimate of $17.5 million.
In the first quarter, net sales in the Defense end market contracted 22% year over year to $35 million. The figure also lagged the consensus estimate of $41.4 million.
The Outside North America On-Highway end market’s net sales surged 30% year over year to $109 million in the quarter, courtesy of growth initiatives and recovery of customer demand in all regions. The figure also beat the consensus mark of $98 million.
Net sales in the Outside North America Off-Highway end market boomed 88% year over year to $30 million. The metric outpaced the consensus mark of $24 million.
Net sales in the Service Parts, Support Equipment & Other end market rose 14% year over year to $139 million in the quarter, owing to higher demand for North America service parts and global support equipment. Moreover, the figure crossed the consensus mark of $133 million.
Financial Position
Allison saw gross profit of $320 million, a 10% increase from $291 million for the same period in 2021, mainly driven by higher net sales and price increases on certain products.
Allison had cash and cash equivalents of $145 million on Mar 31, 2022, falling from $295 million as of 2021-end. Long-term debt was $2,503 million, marginally down from $2,504 million as of Dec 31, 2021. Adjusted free cash flow in the reported quarter was $143 million, up from the prior-year quarter’s $107 million on higher net cash provided by operating activities and lower capital expenditures. Selling, general and administrative expenses rose to $75 million from $73 million. Engineering – research and development expenses in the quarter increased to $43 million from $38 million in the year-ago quarter, primarily driven by higher product initiatives spending.
In the first quarter, Allison settled more than $81 million of share repurchases, representing 2% of shares. It increased the quarterly dividend for the third consecutive year, from 19 cents to 21 cents per share. In February, the company approved a $1 billion increase to its stock repurchase authorization, taking the total amount authorized under the program to $4 billion.
2022 Outlook
For 2022, Allison reaffirmed that it 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 in certain products. Hence, it kept its 2022 projections unchanged. Its estimated net sales remain in the band of $2,625-$2,775 million. Net income and adjusted EBITDA are unchanged in the band of $430-$520 million and $865-$975 million, respectively. Adjusted free cash flow remains constant within $400-$500 million. It maintains its expected net cash provided by operating activities within $570-$680 million. Capex numbers are unchanged in the band of $170-$180 million.
Zacks Rank & Key Picks
ALSN currently carries a Zacks Rank #3 (Hold).
Better-ranked players in the auto space include BRP Group, Inc. (DOOO - 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 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank stocks here.
BRP Group has an expected earnings growth rate of 9.1% for fiscal 2023. The Zacks Consensus Estimate for current-year earnings has been revised around 7.9% upward in the past 60 days.
BRP Group’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters. DOOO pulled off a trailing four-quarter earnings surprise of 68%, on average. The stock has declined 12.5% over the past year.
Dorman Products has an expected earnings growth rate of 18.8% for the current year. The Zacks Consensus Estimate for current-year earnings has been marginally revised 0.7% upwards in the past 60 days.
Dorman Products’ earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed in one. DORM pulled off a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 2% over the past year.
The Zacks Consensus Estimate for Standard Motor’s current-year earnings has been revised around 1.1% upward in the past 60 days.
Standard 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 60.5%, on average. The stock has declined 2.2% over the past year.