Allison Earnings Fall as North American Demand Slips
Allison Transmission Holdings Inc. reported third-quarter net income and revenue slipped for the period ended Sept. 30, as demand for its transmissions fell in North America.
Net income for the quarter was $44.6 million, or 27 cents per share, compared to $46.5 million, or also 27 cents, for the same period in 2015, the Indianapolis-based company said.
Revenue of $434 million was down 12% compared with the same period in 2015. The decrease in net sales was principally driven by lower demand in the North America on-highway and off-highway markets partially offset by stronger demand in the on-highway market outside North America, the company said.
David Leiker, an analyst with R.W. Baird & Co., wrote in a note to investors, “Despite a 12% revenue decline, the company was able to limit gross profit decline, 13% year-over-year, due to its flexible manufacturing structure, along with a benefit from lower material costs.”
The 2016 reductions in North America on-highway, global off-highway and service parts support equipment and other end markets’ net sales are consistent with the previously contemplated impact of low energy and commodity prices and tempering demand conditions in the North America on-highway end market, it said in its earnings report.
Sales for its North American on-highway business fell 15% year-over-year to $224 million. Off-highway sales plunged to $1 million, down 92% from $12 million in the 2015 period, it said.
