Allison Transmission Holdings Earnings: Here’s Why Shares are Down Now

Allison Transmission Holdings Inc (NYSE:ALSN) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.22%.

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Allison Transmission Holdings Inc Earnings Cheat Sheet

Results:

Revenue: Decreased 24.01% to $457.4 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS income of $0.15 per share. By that measure, the company missed the mean analyst estimate of $0.2. It missed the average revenue estimate of $464.24 million.

Quoting Management: Lawrence E. Dewey, Chairman, President and Chief Executive Officer of Allison Transmission commented, “Our first quarter 2013 results are consistent with the guidance we provided to the market on February 19. Despite challenging end markets demand conditions, Allison continued to demonstrate strong operating margins and cash flow by executing initiatives to proactively align costs and programs across our business. Although these initiatives affected our entire organization, we believe Allison continues to be well positioned for a cyclical recovery in the North America On-Highway end market while supporting its Outside North America growth plans. Maintaining our prudent approach to capital structure management we refinanced the remaining balance of our Senior Secured Credit Facility Term B-1 Loan due in 2014, reduced the applicable borrowing margin of our Senior Secured Credit Facility Term B-2 Loan due in 2017, extended the maturity of our $400 million revolving credit facility to 2016 and paid a quarterly dividend to our shareholders. In addition, on April 15, Allison’s Board of Directors approved an increase in its quarterly cash dividend from $0.06 to $0.12 per share, further highlighting our commitments to cash flow generation and the return of capital to shareholders.”

Key Stats (on next page)…

Revenue decreased 6.08% from $487 million in the previous quarter. EPS increased 150% from $0.06 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.3 to a profit $0.32. For the current year, the average estimate has moved down from a profit of $1.17 to a profit of $1.11 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)