Allison Transmission (NYSE:ALSN) Posts Earnings Results

Allison Transmission (NYSE:ALSN) announced its quarterly earnings results on Monday. The auto parts company reported $2.90 earnings per share for the quarter, beating analysts’ consensus estimates of $2.32 by $0.58, FiscalAI reports. The company had revenue of $1.53 billion for the quarter, compared to analyst estimates of $1.47 billion. Allison Transmission had a net margin of 11.12% and a return on equity of 43.23%. Allison Transmission’s revenue for the quarter was up 121.4% on a year-over-year basis. During the same quarter last year, the business earned $1.63 EPS.

Here are the key takeaways from Allison Transmission’s conference call:

• Third-quarter net sales rose 121% year over year to $1.534 billion, including $653 million from the Allison Off-Highway acquisition and a 27% increase in the legacy Allison Transmission business. Adjusted EBITDA increased 56% to $400 million, while adjusted free cash flow rose 51% to $278 million.
• Allison raised its full-year 2026 guidance for revenue, earnings, and cash flow for the second consecutive quarter, now expecting $5.975 billion-$6.075 billion of sales and $850 million-$900 million of adjusted free cash flow. Management expects the Off-Highway acquisition to be accretive to 2026 net income and EPS despite approximately $125 million of one-time pre-tax costs.
• Demand was particularly strong in North American on-highway markets, where quarterly sales reached a record $462 million, up 41% year over year. Management cited pent-up replacement demand in medium-duty trucks, robust Class 8 vocational demand, and a defense order book that is nearly full for 2027.
• The combined company is pursuing an integrated, energy-agnostic propulsion portfolio spanning conventional, hybrid, and electric products, with opportunities to capture more content per vehicle, cross-sell across customers, and generate at least $120 million in identified synergies. Management also sees additional margin opportunities from volume growth, cost reductions, and pricing.
• Raw-material inflation, particularly for steel and aluminum, remains a meaningful margin headwind, while geopolitical uncertainty continues to suppress industrial and agricultural demand in the Off-Highway business. Management also said high-voltage electrification adoption is not accelerating, with current demand concentrated in lower-voltage applications.

Allison Transmission Stock Performance

Shares of NYSE ALSN traded down $1.89 during trading on Wednesday, reaching $117.03. The stock had a trading volume of 142,840 shares, compared to its average volume of 916,650. The company has a debt-to-equity ratio of 2.07, a quick ratio of 1.17 and a current ratio of 1.81. The stock has a market cap of $9.66 billion, a PE ratio of 16.82, a P/E/G ratio of 0.60 and a beta of 1.06. Allison Transmission has a one year low of $78.19 and a one year high of $137.62. The firm’s 50 day moving average price is $117.12 and its two-hundred day moving average price is $118.37.

Allison Transmission Announces Dividend

The company also recently disclosed a quarterly dividend, which was paid on Monday, August 31st. Investors of record on Friday, August 21st were issued a $0.29 dividend. This represents a $1.16 annualized dividend and a yield of 1.0%. The ex-dividend date of this dividend was Friday, August 21st. Allison Transmission’s payout ratio is currently 18.44%.

Insiders Place Their Bets

In other Allison Transmission news, CEO David Graziosi sold 26,708 shares of the firm’s stock in a transaction dated Friday, August 21st. The shares were sold at an average price of $132.97, for a total value of $3,551,362.76. Following the transaction, the chief executive officer owned 304,843 shares of the company’s stock, valued at $40,534,973.71. This trade represents a 8.06% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, insider Eric Scroggins sold 1,050 shares of the company’s stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $125.00, for a total value of $131,250.00. Following the transaction, the insider owned 16,604 shares of the company’s stock, valued at approximately $2,075,500. The trade was a 5.95% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 1.10% of the stock is currently owned by corporate insiders.

Key Stories Impacting Allison Transmission

Here are the key news stories impacting Allison Transmission this week:

• Positive Sentiment: Allison raised its 2026 revenue, earnings and cash-flow outlook for a second consecutive quarter. Revenue guidance is now $6.0 billion–$6.1 billion, above the roughly $5.9 billion analyst consensus. Allison Transmission raised full-year guidance
• Positive Sentiment: Third-quarter results beat expectations: adjusted EPS was $2.90 versus estimates of $2.32, while revenue of $1.53 billion topped the $1.47 billion consensus. Sales rose 121% year over year, partly reflecting the acquired off-highway business; the core Allison Transmission unit also posted record quarterly sales, up 27%. Allison third-quarter results
• Positive Sentiment: Management cited strength across most end markets and expects more than $120 million in acquisition-related synergies in 2027, alongside potential volume, cost and defense-business tailwinds. These factors could support future earnings. Allison Q3 review
• Negative Sentiment: Profitability is a watchpoint: margins declined as the acquired off-highway segment carries lower profitability. The company will need to improve margins and realize expected synergies to translate its stronger sales into sustained earnings growth. Allison Q3 review

Wall Street Analysts Forecast Growth

ALSN has been the subject of a number of research analyst reports. Weiss Ratings raised shares of Allison Transmission from a “hold (c+)” rating to a “buy (b-)” rating in a research report on Tuesday, August 11th. Wells Fargo & Company cut their price target on shares of Allison Transmission from $137.00 to $120.00 and set an “equal weight” rating on the stock in a report on Thursday, October 8th. JPMorgan Chase & Co. reduced their price target on shares of Allison Transmission from $145.00 to $142.00 and set a “neutral” rating on the stock in a research report on Thursday, October 8th. Freedom Broker started coverage on shares of Allison Transmission in a research note on Friday, October 2nd. They set a “buy” rating and a $144.00 price objective for the company. Finally, Morgan Stanley boosted their price objective on shares of Allison Transmission from $126.00 to $130.00 and gave the stock an “equal weight” rating in a research note on Friday, July 17th. Two equities research analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat, Allison Transmission presently has a consensus rating of “Moderate Buy” and an average price target of $131.57.

Allison Transmission Company Profile

Allison Transmission, Inc designs and manufactures propulsion solutions for commercial, defense and off-highway vehicles. The company is best known for its fully automatic transmissions, which are used in applications including refuse collection, construction, distribution, emergency services, public transportation and mining.

Its product portfolio also includes electric and hybrid-electric propulsion systems, including the eGen Power electric axle and other electrification technologies.