Shares of Allison Transmission (ALSN 0.27%) soared 13.9% on Wednesday after the commercial-duty transmission manufacturer announced strong fourth-quarter results.
NYSE: ALSN
Key Data Points
Allison Transmission caps a record year
Allison Transmission's fourth-quarter 2023 revenue grew 7.9% year over year to $775 million, translating to a 26% increase in net income to $170 million, or $1.91 per share. Wall Street analysts, on average, were only expecting quarterly earnings of $1.43 per share on revenue of $745 million.
Company Chairman and CEO David Graziosi noted it was a record year led by "strong demand in our largest end markets." Indeed, Allison Transmission saw net sales climb 13% to $1.529 billion in its North America On-Highway end market and an 18% increase to $696 million from service parts, support equipment, and other related products sales. The company also drove a 14% increase to $166 million in net sales from its Defense segment.
Allison Transmission's per-share earnings were also bolstered by repurchases of $260 million of common stock in 2023 -- a move that reduced its total outstanding share count by nearly 6%.
What's next for Allison Transmission stock?
For full-year 2024, Allison Transmission issued guidance for net sales ranging from $3.05 billion to $3.15 billion -- well above current estimates for 2024 revenue of $3.03 billion -- with net income of $635 million to $685 million and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $700 million to $760 million.
All told, this was an impressive end to a strong year for Allison Transmission. And even with shares up 35% over the past year leading into this report, it's hardly surprising to see the stock extending its rally today.
