Transmission provider Allison Transmission (NYSE: ALSN) will be reporting earnings this Wednesday after market hours. Here’s what to look for.
Allison Transmission beat analysts’ revenue expectations by 1.7% last quarter, reporting revenues of $814 million, flat year on year. It was a strong quarter for the company, with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.
Is Allison Transmission a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, analysts are expecting Allison Transmission’s revenue to decline 7.3% year on year to $764.1 million, a reversal from the 12% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $1.94 per share.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Allison Transmission has missed Wall Street’s revenue estimates twice over the last two years.
Looking at Allison Transmission’s peers in the heavy machinery segment, some have already reported their Q3 results, giving us a hint as to what we can expect. PACCAR’s revenues decreased 19% year on year, beating analysts’ expectations by 0.6%, and Wabtec reported revenues up 8.4%, in line with consensus estimates. PACCAR traded up 2.4% following the results while Wabtec’s stock price was unchanged.
Read our full analysis of PACCAR’s results here and Wabtec’s results here.
There has been positive sentiment among investors in the heavy machinery segment, with share prices up 3.8% on average over the last month. Allison Transmission is down 1.2% during the same time and is heading into earnings with an average analyst price target of $103 (compared to the current share price of $83.40).
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