Allison Transmission (ALSN) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 net sales of $816 million, up 4% year-over-year, driven by strong North America On-Highway and Defense demand, and price increases.

• Net income rose to $187 million, up from $175 million in Q2 2023, with diluted EPS increasing 11% to $2.13.

• Adjusted EBITDA reached $301 million, up from $288 million year-over-year, with a margin of 36.9%.

• Raised full-year 2024 guidance for revenue, earnings, and cash flow, reflecting ongoing market strength and robust order books.

• Returned capital to shareholders via $0.25/share dividend and $31 million in share repurchases during Q2.

Financial highlights

• Gross profit for Q2 was $394 million, up $13 million year-over-year, mainly due to price increases and higher sales.

• Adjusted free cash flow was $150 million, up from $122 million in Q2 2023; net cash from operating activities was $171 million, up $30 million year-over-year.

• Selling, general and administrative expenses decreased by $10 million to $82 million.

• North America On-Highway net sales grew 15% year-over-year to $456 million, led by Class 8 vocational and medium-duty trucks.

• Defense end market sales increased 30% year-over-year to $43 million, driven by tracked vehicle demand.

Outlook and guidance

• 2024 net sales expected between $3.09 billion and $3.17 billion; net income guidance: $650 million–$700 million.

• Adjusted EBITDA forecasted at $1.085 billion–$1.145 billion; adjusted free cash flow at $590 million–$640 million.

• Net cash from operations: $715 million–$775 million; capital expenditures: $125 million–$135 million.

• Guidance reflects strong North America On-Highway demand, robust order books for Q3 and Q4, and seasonality expected to impact Q4.