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Allison Reports Lower Q3 Results
Allison Transmission Holdings Inc. reported lower net income and revenue in the third quarter amid uneven demand in its markets.
鈥淲e are pleased to report that Allison鈥檚 third-quarter 2019 results are within the full-year guidance ranges provided to the market on July 31, and our North American on-highway end market remains on track for a third consecutive record year, led by the ongoing execution of our growth initiatives and recent market share gains in Class 4 and Class 5 trucks,鈥 Allison CEO David Graziosi said in the earnings release.
Net income for the period ended Sept. 30 fell to $149 million, or $1.23 per diluted share, compared with $167 million, or $1.27 a year earlier.
Graziosi
Revenue dropped to $669 million compared with $692 million a year earlier.
Other results included an 11% rise in North America on-highway sales year-over-year, principally driven by higher demand for its rugged-duty series and highway series models.
North America off-highway market net sales were down $6 million from the same period in 2018, principally driven by lower demand from hydraulic fracturing applications.
Defense market net sales were down 5% from the same period in 2018, principally driven by lower wheeled vehicle demand.
Outside North America, on-highway market net sales were up 3% from the same period in 2018, principally driven by higher demand in Europe and South America, partially offset by lower demand in Asia.
Outside North America, off-highway market net sales were down $22 million from the same period in 2018, principally driven by lower demand in the mining and energy sectors.
Service Parts, Support Equipment & Other market net sales were down 20% from the same period in 2018 and down 11% sequentially, in both cases principally driven by lower demand for North America service parts.
Graziosi added: 鈥淎llison continues to demonstrate solid operating margins and free cash flow while executing its prudent and well-defined approach to capital structure and allocation. During the third quarter, we settled $46 million of share repurchases, paid a dividend of 15 cents per share, and closed the acquisitions of Walker Die Casting and C&R Tool and Engineering. In October, we completed an opportunistic repricing of our $646 million term loan due March 2026.鈥
Allison鈥檚 updated full-year 2019 guidance included revenue in the range of $2.65 billion to $2.7 billion; net income in the range of $555 million to $575 million; adjusted earnings before interest depreciation and amortization in the range of $1.03 billion to $1.06 billion; net cash provided by operating activities in the range of $745 million to $775 million; adjusted free cash flow in the range of $570 million to $610 million; and cash income taxes in the range of $95 million to $105 million.
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