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LONDON, UK / ACCESSWIRE / May 24, 2018 / If you want access to our free earnings report on Allison Transmission Holdings, Inc. (NYSE: ALSN) ("Allison"), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=ALSN. The Company reported its first quarter fiscal 2018 operating and financial results on April 30, 2018. The largest global provider of commercial duty fully-automatic transmissions outperformed top- and bottom-line expectations. Additionally, the Company raised its sales guidance for FY18. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
For the first quarter of the fiscal year 2018, Allison reported net sales of $663 million, reflecting a 33% increase from $499 million in Q1 2017. The increase in net sales was principally driven by a higher demand in the Global On-Highway, Service Parts, Support Equipment & Other, and Global Off-Highway end markets. The Company's revenue numbers topped analysts' estimates of $565.7 million.
During Q1 2018, Allison's gross profit surged 36% to $342 million from $251 million in Q1 2017. The Company's gross margin was 51.6% in the reported quarter, representing an increase of 130 basis points (bps) from a gross margin of 50.3% in the prior year's same quarter.
For Q1 2018, Allison's selling, general, and administrative expenses were $92 million, reflecting an increase of 16% from $79 million in Q1 2017. The increase was principally driven by unfavorable product warranty adjustments and higher warranty expense commensurate with increased net sales. The Company's income tax expenses were $40 million, resulting in an effective tax rate of 21%, in the reported quarter versus $44 million in income tax expenses and an effective tax rate of 35% in Q1 2017. The decrease in effective tax rate was principally driven by the US Tax Cuts and Jobs Act (TCJA) enacted into law in 2017.
Allison's net income was $151 million, or $1.08 per diluted share, in Q1 2018 compared to $83 million, or $0.52 per diluted share, in Q1 2017. The increase was principally driven by an increased gross profit and decreased income tax expenses. The Company's earnings surpassed Wall Street's estimates of $0.79 per share.
During Q1 2018, Allison's North America On-Highway end market's net sales surged 24% to $315 million on a y-o-y basis, principally driven by a higher demand for Rugged Duty Series models. The Company's North America Electric Hybrid-Propulsion Systems for Transit Bus end market's net sales advanced 20% to $24 million in Q1 2018 versus the year ago comparable period, due to the timing of certain transit property orders.
For Q1 2018, Allison's North America Off-Highway end market's net sales rocketed 3,200% to $33 million, principally driven by a higher demand from hydraulic fracturing applications. The Company's Defense end market's net sales surged 37% to $37 million on a y-o-y basis, primarily attributed to higher Tracked and Wheeled demand.
Allison's Outside North America On-Highway end market's net sales gained 26% to $91 million on a y-o-y basis, principally driven by a higher demand in Europe, Asia, and South America. The Company's Outside North America Off-Highway end market's net sales doubled to $12 million, due to an improved demand in the mining and construction sectors.
During Q1 2018, Allison's Service Parts, Support Equipment & Other end market's net sales were up 28% to $151 million on a y-o-y basis, principally driven by a higher demand for North America Off-Highway service parts and global support equipment.
For Q1 2018, Allison's net cash provided by operating activities was $153 million, up 38% compared to $111 million in Q1 2017. The Company's adjusted free cash flow surged 39% to $143 million in the reported quarter compared to $103 million in the year ago corresponding period.
During Q1 2018, Allison settled $125 million of share repurchases, paid a dividend of $0.15 per share, and completed a re-pricing of its $1,176 million term loan debt due September 2022.
Given the first quarter 2018 results and current end markets conditions, Allison raised its full year 2018 net sales guidance from an increase in the range of 3% to 7% to an increase in the band of 10% to 14%. The Company is estimating net income to be in the band of $515 million to $550 million; net cash provided by operating activities to be in the range of $720 million to $760 million; and adjusted free cash flow to be in the band of $625 million to $675 million.
Allison did not provide a specific second quarter 2018 guidance. However, the Company does expect net sales to be up on a y-o-y basis for Q2 2018.
Stock Performance Snapshot
May 23, 2018 - At Wednesday's closing bell, Allison Transmission's stock declined 1.77%, ending the trading session at $43.21.
Volume traded for the day: 1.08 million shares.
Stock performance in the last month – up 10.99%; previous three-month period – up 9.89%; past twelve-month period – up 13.09%; and year-to-date – up 0.33%
After yesterday's close, Allison Transmission's market cap was at $5.97 billion.
Price to Earnings (P/E) ratio was at 14.87.
The stock has a dividend yield of 1.39%.
The stock is part of the Consumer Goods sector, categorized under the Auto Parts industry. This sector was up 0.1% at the end of the session.
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