Allison Transmission 2Q Net Income Soars 58%, Revenue Up 22%

Allison Transmission
Karen Kay Marlett Photography

Allison Transmission Inc. posted strong second-quarter gains in net income and revenue following higher demand in North America for service parts and on-highway products.

Net income soared 58% to $95 million, or 63 cents per diluted share for the period ended June 30, compared with $61 million, or 36 cents a year earlier — with the gain primarily stemming from an increase in gross profit, the automatic transmission maker said.

Gross profit in the quarter was $290 million, up 28% compared with $227 million a year earlier. Higher net sales and price increases on certain products partially offset by higher incentive compensation and higher manufacturing expenses commensurate with the increased net sales led to the improvement, the Indianapolis-based company said.

“Allison’s second quarter 2017 results exceeded the full-year guidance ranges we provided to the market on April 26, principally driven by stronger than anticipated demand for North America service parts and North America on-highway products,” Lawrence Dewey, Allison chairman and CEO, said in a statement.

Second-quarter revenue rose 22% to $580 million, compared with $475 million a year earlier. The company linked the increase to higher demand in the service parts, support equipment and global on-highway end markets.

Year-to-date, net income jumped to $178 million, or $1.15, compared with $109 million, or 64 cents, in the same period in 2016.

Revenue for the six-month period increased to $1.1 billion, compared with $937 million in the same period a year-ago earlier.

In its updated full-year 2017 guidance, Allison said year-over-year net sales would increase between 15% and 17% from stronger demand for North America off-highway service parts, North America on-highway products and global off-highway products — and the guidance assumes price increases on certain products.