Allison Projecting 50% Drop in 1Q Net Income
Allison Transmission Holdings Inc. said Monday (April 15) that it expects its first-quarter net income to fall by more than half, but that would still beat current Wall Street predictions.
According to an Associated Press report, the Indianapolis-based company, which makes automatic transmissions for commercial, military and transit vehicles, also said it’s doubling its quarterly cash dividend and announced that some of its shareholders plan to sell 22 million shares of its stock in an offering.
For the quarter ended March 31, Allison projected net income of $27.5 million, down from $58 million in the year-ago period. Revenue is expected to total $455 million to $460 million, compared with $601.9 million a year ago.
Analysts, on average, expect earnings of $21.2 million on $459.3 million in revenue, according to FactSet.
The company said the quarter’s results reflect considerably lower North American demand for equipment used in hydraulic fracturing, along with lower defense sales.
Allison reaffirmed its full-year guidance of a sales decline of between 6% and 8%. Based on the company’s 2012 results, the guidance implies 2013 revenue of between $1.97 billion and $2.01 billion. Analysts expect $1.99 billion.
The company said that for the full-year, it still expects low demand from the North Americas hydraulic fracturing market and reductions to U.S. defense spending, along with lower demand for North American hybrid-propulsion systems used in buses.