Allison Transmission Reports 12% Revenue Growth in Q3 2024, Net Income Reaches $200M

Allison Transmission Holdings, Inc. reported significant financial growth for the third quarter and the first nine months of 2024, reflecting a robust performance across its key markets. For the three months ended September 30, 2024, net sales reached $824 million, a 12% increase from $736 million in the same period of 2023. The nine-month figures also showed growth, with net sales of $2,429 million, up from $2,260 million year-over-year.

The increase in revenue was primarily driven by a 22% rise in the North America On-Highway segment, which generated $457 million, attributed to heightened demand for Class 8 vocational vehicles and medium-duty trucks, alongside price increases. The Defense segment also saw a 23% increase, contributing $53 million, while sales outside North America On-Highway rose by 7% to $126 million. However, the Global Off-Highway segment experienced a 29% decline due to reduced demand from the energy sector and mining and construction industries.

Gross profit for the third quarter was $396 million, an 11% increase from $357 million in Q3 2023, while gross profit margins slightly decreased to 48%. Operating income improved to $260 million from $222 million, and net income for the quarter was $200 million, compared to $158 million in the prior year. Basic earnings per share rose to $2.30 from $1.76.

For the nine months ended September 30, 2024, net income was $556 million, up from $503 million in 2023, with basic earnings per share increasing to $6.39 from $5.53. The company reported net cash provided by operating activities of $590 million, an increase from $546 million in the same period last year.

Allison Transmission's total assets grew to $5,368 million as of September 30, 2024, up from $5,025 million at the end of 2023. Cash and cash equivalents also increased significantly to $788 million from $555 million. The company maintained a strong financial position with a first lien net leverage ratio of (0.23x) and no outstanding borrowings under its $750 million Revolving Credit Facility.

Strategically, the company completed a pension risk transfer in June 2024, which involved a $30 million transfer of pension plan assets and obligations, resulting in a $4 million non-recurring settlement charge. Additionally, a new four-year collective bargaining agreement ratified in January 2024 is expected to increase labor costs significantly.

Allison Transmission continues to focus on growth initiatives and anticipates higher net sales in 2024, driven by price increases and increased demand in its core markets.