Allison’s second quarter at a glance:
- Allison reached an agreement with Dana Incorporated to purchase its off-highway business.
- Allison reported a net income of $195 million, up 4% year over year.
- Net sales for the second quarter were $814 million with an increase in the defense market and the outside North America on-highway market, driven by demand in South America and Europe.
Allison Transmission reported its second-quarter earnings on Tuesday, reporting a 4% increase in net income.
"Delivering record quarterly earnings per share, while incurring one-time costs associated with our recently announced acquisition of the Dana off-highway business, is a clear reflection of the Allison team's continued focus on execution and delivering strong financial performance," says David S. Graziosi, chair and CEO of Allison. "Our second quarter results, highlighted by continued growth in the defense end market and a record $142 million of quarterly net sales in the outside North America on-highway end market, demonstrate the diversity of Allison's end markets and the incremental sales opportunities available from growth initiatives."
The deal with Dana is worth about $2.7 billion. It will close late 2025.
"Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $313 million increased 4% year over year in the second quarter as Allison is well-positioned to navigate current trade uncertainties while focusing on operational efficiencies and the alignment of costs and initiatives with end market developments," Graziosi says. "Our capital allocation priorities remain intact with $102 million of our common stock, representing over 1% of outstanding shares, repurchased during the second quarter. Year-to-date, we have repurchased 3% of our outstanding shares."
Allison's sales numbers
Net sales for the quarter were $814 million, including a $20 million increase in net sales in the defense market and a $14 million increase in net sales in the outside North America on-highway market. Allison also saw a $10 million increase in net sales in the service parts, support equipment and other market, driven by a higher demand for service parts and price increases on some products, partially offset by lower demand for aluminum die cast components.
In the North American on-highway market, Allison saw a $39 million decrease in net sales. That was mainly driven by lower demand for medium-duty trucks, the company says, and is partially offset by certain price increases.
Other financial results
Gross profit for the second quarter was $402 million which is $8 million more than the same period in 2024. That increase comes from price increases, partially offset by lower volumes and unfavorable material costs.
Selling, general and administrative expenses for the second quarter were $102 million, up $20 million year over year. Dana says the increase stems from $15 million in expenses related to the Dana acquisition. Research and development costs were $44 million, down $5 million year over year.
Net income from the quarter was $195 million. That's up $8 million year over year, driven by higher gross profit and unrealized adjustments for marketable securities, partially offset by increased selling, general and administrative expenses, including $15 million in acquisition costs.
Allison had $184 million in net cash, up $13 million year over year. It comes from lower operating working capital funding requirements and higher gross profit, offset in part by acquisition-related expenses.
Guidance
Allison is revising its full-year 2025 guidance, given end-market conditions, acquisition expenses, and expected favorable cash income tax impacts from recently passed federal legislation.
The company now expects 2025 net sales to be $3,075-$3,175 million. Net income is expected to be in the range of $640-$680 million and adjusted EBITDA is predicted to be $1,130-$1,180 million. Net cash should be $785-$835 million with capital expenditures $165-$175 million. Adjusted free cash flow is expected to be in the range of $620-$660 million.
