Allison Transmission Holdings Earnings: Here’s Why the Stock is Falling Now

Allison Transmission Holdings Inc (NYSE:ALSN) delivered a profit and missed Wall Street’s expectations, BUT beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are down 6.11%.

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Allison Transmission Earnings Cheat Sheet

Results:

Revenue: Decreased 5.64% to $487 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: reported adjusted EPS income of $0.06 per share. By that measure, the company missed the mean analyst estimate of $0.07. It beat the average revenue estimate of $438.52 million.

Quoting Management:Lawrence E. Dewey, Chairman, President and Chief Executive Officer of Allison Transmission commented, “Despite significant declines in the North America energy sector’s hydraulic fracturing market, we continued to demonstrate strong operating margins and cash flow while concluding a new five-year labor agreement with the UAW Local 933. The Global On-Highway end markets were stronger than anticipated despite increased seasonal production downtime taken by many of our customers and somewhat elevated commercial vehicle retail inventory levels. Maintaining our prudent approach to capital structure management we refinanced an additional $300 million of our Senior Secured Credit Facility Term B-1 Loan due in 2014, repaid $95 million of debt and paid a quarterly dividend to our shareholders. Given the continued heightened level of uncertainty in our end markets, we are taking a cautious approach to 2013. Consequently we have implemented several initiatives to proactively align costs and programs across our business with the lack of near-term visibility and confidence in certain of our end markets.”

Key Stats (on next page)…

Revenue decreased 1.32% from $493.5 million in the previous quarter. EPS decreased 64.71% from $0.17 in the previous quarter.

Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.27 to a profit $0.26. For the current year, the average estimate has moved up from a profit of $2.64 to a profit of $2.75 over the last ninety days.

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