Allison Transmission (ALSN) Misses Q4 EPS by 18c, Revenues Beat; Offers FY21 Revenue Guidance

Allison Transmission (NYSE: ALSN) reported Q4 EPS of $0.53, $0.18 worse than the analyst estimate of $0.71. Revenue for the quarter came in at $535 million versus the consensus estimate of $521.36 million.

• Fourth Quarter 2020: Net Sales $535 million, Net Income $60 million, Diluted EPS $0.53, Adjusted EBITDA $186 million, Net Cash Provided by Operating Activities $163 million, Adjusted Free Cash Flow $128 million
• Full Year 2020: Net Sales $2,081 million, Net Income $299 million, Diluted EPS $2.62, Adjusted EBITDA $732 million, Net Cash Provided by Operating Activities $561 million, Adjusted Free Cash Flow $458 million

David S. Graziosi, President and Chief Executive Officer of Allison Transmission commented, “As we continue to navigate this critical period, the health and well-being of Allison’s extended family remains our top priority. 2020 was an unprecedented year. Severe disruptions to the global economy as a result of the ongoing pandemic led to substantial volatility in demand and considerable supply chain constraints. Despite these challenges, Allison was able to maintain the uninterrupted delivery of our products, and the generation of earnings and positive cash flow thanks to the unrelenting commitment, dedication and resilience of Allison’s employees, customers and suppliers.”

Graziosi continued, “Aggressive cost management efforts throughout the year while continuing to fund significant investments in engineering – research and development and capital expenditures have positioned Allison to capitalize on meaningful growth opportunities that lie ahead. Also during 2020, Allison settled a total of $225 million of share repurchases, or over 5 percent of outstanding shares and completed an opportunistic refinancing of our long-term debt, resulting in an anticipated annual savings of $13 million in cash interest expense, with the earliest maturity due in 2026. Consistent with our capital allocation priorities, last week the Board of Directors approved a 12 percent increase to our quarterly dividend from $0.17 to $0.19 per share.”

GUIDANCE:

Allison Transmission sees FY2021 revenue of $2.265-2.415 billion, versus the consensus of $2.31 billion.

Allison expects 2021 Net Sales in the range of $2,265 to $2,415 million, Net Income in the range of $375 to $445 million, Adjusted EBITDA in the range of $770 to $860 million, Net Cash Provided by Operating Activities in the range of $560 to $630 million, Adjusted Free Cash Flow in the range of $390 to $450 million and Capital Expenditures in the range of $170 to $180 million.

Our 2021 net sales guidance reflects higher demand in the global On-Highway and Service Parts, Support Equipment & Other end markets as a result of the ongoing global economic recovery, continued improvement in customer demand, and price increases on certain products. Our 2021 net income guidance reflects a 30% increase in engineering – research and development expenses to fund product development initiates in support of organic growth across all of our end markets.

For earnings history and earnings-related data on Allison Transmission (ALSN) click here.

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