Allison Transmission Delivers 'Very Solid' Q1 Results; Outlook Reaffirmed

Allison Transmission Holdings Inc (NYSE: ALSN) shares were quiet in post-market action Monday afternoon. Investors in the name responded to first-quarter earnings and affirmed fiscal year guidance which remained above Wall Street estimates.The company reported quarterly non-GAAP net income of $109 million, down about 27 percent from the same quarter last year. Adjusted earnings per share totaled $0.33.Sales came in at $462 million, better than the $445 million analysts on Wall Street had been expecting. Sales were down about 8 percent on a year-over-year basis.Allison's Chair and CEO, Lawrence Dewey, commented on the sales performance: "The year-over-year reductions in the global Off-Highway and Service Parts, Support Equipment & Other end markets net sales are consistent with the previously contemplated impact of low energy and commodity prices."

Affirmed Outlook

"We anticipate no meaningful relief from the global Off-Highway end market challenges and are affirming our full year net sales guidance of a decrease in the range of 6.5 to 9.5 percent," Dewey said. The full year outlook represents total sales of about $1.83 billion to $2.15 billion, above analysts' $1.82 billion sales consensus estimate.

One Analyst's Take

Kristine Kubacki at Avondale Partners offered an initial take at Allison's first-quarter results and outlook."Allison delivered a very solid quarter in a tough global environment, particularly for commodity tied off-highway markets. We think the quarter and the reaffirmation of guidance are largely ‘good enough' for investor expectations to move the stock higher."Kubacki and Avondale reiterated a Market Outperform rating and $30 price target on shares of Allison Transmission.Allison shares were last indicated at $27.95,