Allison Transmission shares rally on record sales

Shares of Allison Transmission (NYSE:ALSN) were launched to an all-time high after the company reported record Q4 and year-end results that topped Street expectations.

Shares were as much as 17% higher from yesterday’s close.

“Allison’s fourth quarter marks the highest fourth quarter revenue in our history, leading to a record year driven by strong demand in our largest markets…as a result we are guiding to another record revenue year for 2024 as we continue to realize our investments and expand our addressable market,” CEO David Graziosi said.

Driven by strong demand for Class 8 vocational and medium-duty trucks, wheeled and tracked vehicle applications, and service parts and other end market sales, net sales increased $57M to $775M, beating estimates by $30.42M.

Net profit improved to $1.91 per share from $1.52 per share in the prior year’s quarter, above expectations by $0.46.

Adjusted EBITDA rose $32M from the same quarter last year to $277M, and as a percentage of net sales rose to 35.7% from 34.1% year-over-year.

For 2024, Allison Transmission (ALSN) is forecasting net sales to be between $3.05B-$3.15B and net income between $635M-$685M. This compares to 2023 figures of $3.05B and $674, respectively. The consensus estimate is for 2024 revenue of $3.05B.

Although the company didn’t provide Q1 forecasts, recent developments in 2024 could augment Q1 results. The company was selected by Oshkosh (OSK) as its electric axle supplier for its zero-emission electric refuse collection vehicle, and became a strategic partner with SANY to provide transmissions for SANY’s off-road and wide-body mining vehicles.