Allison Q3 Results Improve on Broad Gains

Newly manufactured transmissions. (Allison Transmission Inc.)

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Allison Transmission Holdings Inc. reported higher third-quarter net income and revenue as five of six of its end markets climbed.

Net income for the period ended Sept. 30 reached $139 million, or $1.46 per diluted share, compared with $94 million, 89 cents, a year earlier.

Revenue increased 25% to $710 million compared with $567 million in the same 2021 period.

Sales rose with what the Indianapolis-based company termed “resilient customer demand,” price increases and the continued execution of growth initiatives. The increase in year-over-year results was led by a 24% increase in the North American On-Highway end market, its largest, driven by continued strength in customer demand for last-mile delivery, regional haul and vocational trucks.

Other factors included:

  • A 25% increase in net sales in its service parts, support equipment and other end market — principally driven by global service parts and support equipment, and aluminum die cast components.
  • A $26 million increase in net sales in the Global Off-Highway end markets driven by demand for hydraulic fracturing applications in the energy sector as well as higher demand in the mining and construction sectors.
  • Record quarterly net sales came in the outside North America on-highway end market, as a result of a 27% increase in net sales driven by the continued execution of our growth initiatives in Europe, Asia and South America.

Its North American on-highway market increased revenue 24% to $340 million compared with $275 million a year earlier.

North America off-highway revenue rose 20% to $24 million compared with $20 million in the 2021 period.

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Defense revenue slipped 10% to $35 million compared with $39 million a year earlier.

Outside North America on-highway revenue rose 27% to $118 million compared with $93 million a year earlier.

Outside North America off-highway revenue was up 157% to $36 million compared with $14 million in the 2021 period.

The service parts, support equipment and other segments’ revenue rose 25% to $157 million compared with $126 million a year earlier.

“Despite the broad and ongoing challenges to supply chains, our third-quarter 2022 results demonstrate notable performance with net sales in five out of six end markets up 20% or more year over year,” Chairman and CEO David Graziosi commented in a release.

For the quarter, on a year-over-year basis, pricing was favorable by $29 million, it noted.

Allison reported it ended the quarter with $180 million of cash and $645 million of available revolving credit facility commitments.

In the earnings call, Graziosi said, “You know all the attributes that are supporting the market right now in terms of significant backlogs because of the lack of production really dating back to 2020 and into 2021 at this stage. It certainly supports a relatively, from our perspective, expectation for a pretty healthy market over the near to medium term.”

Allison CEO David Graziosi


He added that expectation included the vocational segment.

“We do have a fair bit of business in the vocational space that continues to be strong for us, and that’s prior to some of this infrastructure legislation that’s been passed to actually take hold,” he said, “but I would say, overall, North America continues to be a pretty strong market.”

Allison raised its full-year 2022 guidance while narrowing the guidance ranges released to the market on Aug. 3. It expects net sales for 2022 to be in the range of $2.69 billion to $2.74 billion.

It anticipates full-year net income in the range of $490 million to $510 million.

Allison Transmission is a global propulsion technology company that designs, manufactures and distributes vehicle propulsion solutions for commercial, agricultural and defense vehicles.