Allison posts record quarterly sales of $1.534 billion and raises 2026 outlook
Key Facts
Allison Transmission said on November 2 that consolidated sales reached $1.534 billion in the third quarter of 2026, up 121% year over year, including the addition of the Off-Highway business it acquired on January 1, 2026. Net income was $191 million, up $54 million from the same period a year earlier. Diluted earnings per share were $2.30, while adjusted diluted earnings per share were $2.90, up 59% year over year. The adjusted figure topped Zacks’ consensus estimate of $2.47 and was also above earnings of $1.63 a year earlier, according to Zacks. Analysts had forecast earnings of $2.32 per share and sales of $1.47 billion before the announcement, according to a report published by Investing.com citing Reuters.
Consolidated gross profit was $505 million, compared with $330 million in the third quarter of 2025, an increase of $175 million. The company attributed the increase mainly to the addition of the Off-Highway business and a $77 million rise in gross profit at the Allison Transmission business. The legacy business posted record quarterly sales of $881 million, up 27% year over year, while its gross profit reached $407 million, compared with $330 million a year earlier. The company said higher volumes of medium-duty and vocational Class 8 trucks, as well as price increases, supported the business’s performance. These gains were partly offset by higher direct material costs and manufacturing expenses.
The Off-Highway business recorded quarterly sales of $653 million and gross profit of $98 million, equal to 15% of sales. Operating profit was $32 million, or 5% of sales. Chief Executive David Graziosi said mining momentum remained strong and construction and materials handling grew year over year in all regions. He added that demand in the industrial and agricultural sectors remained weak. The business contributed to quarterly results following Allison’s June acquisition of Dana’s Off-Highway business for $2.7 billion.
Adjusted earnings before interest, taxes, depreciation and amortization rose to $400 million, up $144 million from $256 million in the year-earlier period, with a margin of 26.1%. Net cash generated from operating activities was $343 million, up 50% year over year, while adjusted free cash flow reached $278 million, up 51%. The company said cash generated since the start of the year supported repayment of more than $400 million of debt. During the quarter, it paid $23 million in dividends and repurchased $57 million of common stock. It ended the quarter with about $500 million in cash and cash equivalents, available borrowing capacity of $996 million, total debt of $4.012 billion and net debt of $3.515 billion.
Allison raised its 2026 guidance for the second consecutive quarter, forecasting consolidated sales of $5.975 billion to $6.075 billion and net income of $645 million to $685 million. It also raised its adjusted earnings before interest, taxes, depreciation and amortization range to $1.530–$1.580 billion, from a previous range of $1.465–$1.575 billion announced with its second-quarter results. The net income guidance includes about $125 million in one-time pretax expenses related to the separation, integration and restructuring of the Off-Highway business. This includes about $65 million related to the adjusted inventory basis. The company’s stock closed at $108.05 on October 30, before the results announcement published on November 2; the cited closing-price data do not provide post-announcement movement.