Allison Transmission Holdings ALSN posted first-quarter 2023 earnings of $1.85 a share, which rose 42% year over year and topped the Zacks Consensus Estimate of $1.52 owing to higher-than-anticipated sales from North America On-Highway, North America Off-Highway and Service Parts, Support Equipment & Other end markets. Quarterly revenues of $741 million grew 9% from the year-ago period and crossed the consensus mark of $715 million.
Allison currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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 rose 9% year over year to $376 million amid robust customer demand for medium-duty and Class 8 vocational trucks along with price increases in certain products. Also, the metric surpassed the Zacks Consensus Estimate of $351 million.
Net sales in the North America Off-Highway end market jumped 33% to $24 million from the year-ago period and exceeded the Zacks Consensus Estimate of $21.34 million.
In the reported quarter, net sales in the Defense end market declined 23% year over year to $27 million and lagged the consensus estimate of $37.23 million.
The Outside North America On-Highway end market’s net sales inched down 1% year over year to $108 million in the quarter and lagged the consensus mark of $123 million.
Net sales in the Outside North America Off-Highway end market contracted 23% year over year to $23 million and lagged the consensus mark of $31.43 million.
Net sales in the Service Parts, Support Equipment & Other end markets grew 32% year over year to $183 million in the quarter, owing to higher prices and solid demand for global service parts and support equipment and aluminum die-cast components. Moreover, the figure crossed the consensus mark of $147 million.
Financial Position
Allison saw a gross profit of $361 million, a 13% increase from $320 million for the same period in 2022, mainly driven by higher net sales and price increases on certain products.
Adjusted EBITDA in the quarter came in at $276 million, an increase of 13% from $244 million a year ago. The growth was led by higher gross profit.
Selling, general and administrative expenses in the quarter increased to $87 million from $75 million for the same period in 2022, driven by higher commercial activity expenses. Engineering – research and development expenses were $44 million compared with $43 million recorded in the corresponding quarter of 2022.
Allison had cash and cash equivalents of $344 million on Mar 31, 2023, up from $232 million as of Dec 31, 2022. Long-term debt was $2,500 million compared with $2,501 million as of Dec 31, 2022.
Net cash provided by operating activities increased to $193 million from $162 million in the same period in 2022. Adjusted free cash flow in the reported quarter was $169 million, an increase from $142 million a year ago.
During the first quarter, the company hiked its quarterly dividend by 10% to 23 cents/share and repurchased 1% of outstanding shares.
2023 Outlook Raised
Allison’s full-year 2023 net sales are estimated in the band of $2.9-$3 billion. Net income is expected in the band of $550-$600 million. Adjusted EBITDA is estimated within $1.01-$1.09 billion. Adjusted free cash flow is estimated within $510-$560 million. Its expected net cash provided by operating activities is between $635 and $695 million. Capex is expected in the band of $125-$135 million.
Peer Releases
Autoliv ALV reported first-quarter 2023 adjusted earnings of 90 cents per share, beating the Zacks Consensus Estimate of 87 cents. Higher-than-expected revenues from the Airbags and Associated Products segment led to the outperformance. The bottom line also shot up 99% on a year-over-year basis. The company reported net sales of $2,493 million in the quarter, which topped the Zacks Consensus Estimate of $2,283 million and soared 17% year over year. Organic sales rose 21% year over year and breezed past the consensus mark of 6.27%.
Autoliv had cash and cash equivalents of $713 million as of Mar 31, 2023, down 24% year over year. Long-term debt totaled $1601 million, increasing from $1,054 million as of Dec 31, 2022.The company forecasts full-year 2023 organic sales growth of around 15%.
Lear Corp. LEA reported first-quarter 2023 adjusted earnings of $2.78 per share, which surged from $1.80 recorded in the year-ago quarter. The bottom line also surpassed the Zacks Consensus Estimate of $2.55 per share. Higher-than-expected contribution from the Seating segment led to the outperformance. In the reported quarter, revenues increased 12% year over year to $5,845.5 million. The top line also beat the Zacks Consensus Estimate of $5,505 million.
The company had $898.5 million in cash and cash equivalents at the quarter’s end versus $1,114.9 million recorded as of Dec 31, 2022. Lear had long-term debt of $2,591.6 million at the quarter end compared with a debt of $2,591.2 million as of 2022-end.
Oshkosh Corp. OSK reported first-quarter 2023 adjusted earnings of $1.59 per share, beating the Zacks Consensus Estimate of $1. The outperformance can be largely attributed to higher-than-expected sales and profits from the Access segment. The bottom line also rocketed 488% from 27 cents recorded in the year-ago period. In the quarter under review, consolidated net sales climbed 16.6% year over year to $2,268 million. The top line surpassed the Zacks Consensus Estimate of $2,091 million.
Oshkosh had cash and cash equivalents of $538.7 million as of Mar 31, 2023. The company recorded a long-term debt of $595.2 million, essentially flat from the 2022-end levels. Oshkosh declared a quarterly cash dividend of 41 cents per share. The dividend will be paid out on May 30 to shareholders on record as of May 15, 2023.
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