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October 30, 2018 1:00 PM, EDT

Allison’s Net Income Jumps 50% in Third Quarter

Allison Allison's Indianapolis plant. (Karen Kay Marlett Photography)

Supplier Allison Transmission posted sizable third-quarter gains in net sales and net income, exceeding expectations and leading to projections that 2018 will be a record year for the company.

The bump in net sales was driven principally by greater demand in key end markets, including global on-highway, outside North America off-highway, and service parts and support equipment.

Net income was $167 million for the period ending Sept. 30, an increase of 50% over the $111 million for the same period in 2017. Net sales jumped 16%, to $692 million from $595 million.

For the North American on-highway end market — Allison’s largest revenue generator — net sales were up 10%, largely due to higher demand for Rugged Duty Series models. That number was down 3% from the second quarter, which the company attributed to lower demand for Transit Series and Pupil Transport/Shuttle models.

The North American off-highway end market net sales dropped 29%, to $12 million from $17 million, and dropped $19 million sequentially. Both decreases were due to lower demand from hydraulic fracturing applications, the company reported.

But diluted earnings per share stood at $1.27, up 69% year-over-year.

“Given third-quarter 2018 results and current end markets conditions, we are raising our full-year 2018 net sales guidance from an increase in the range of 15-18% to the range of 18-19%,” Allison CEO David Graziosi said.

Allison, founded in 1915, is based in Indianapolis and has approximately 2,700 employees worldwide.