Indianapolis-based Allison Transmission Holdings Inc. reported a decrease in net income for its second quarter on lower sales, primarily driven by lower demand in parts of the North American energy sector.
Net income was $50.5 million, or 26 cents per share, compared to $412.8 million, or $2.21 per share, in the same period last year. Sales for the quarter totaled $512 million, an 8% decrease from $559.4 million during the same period in 2012.
Lawrence E. Dewey, chairman, president and CEO, noted, “In the second quarter, Allison continued to demonstrate strong operating margins and cash flow by executing initiatives to proactively align costs and programs across our business as our revenue trajectory improved relative to the first quarter of the year. The anticipated near-term improvement in global On-Highway end markets notwithstanding, we will continue to aggressively align costs and investments with growth plans and our commitments to cash flow generation and the return of capital to shareholders.”
Gross profit for the quarter was $226 million, a decrease of 10% from $252 million for the same period in 2012. Gross margin for the quarter was 44.2%, a decrease of 80 basis points from a gross margin of 45% a year ago. The decrease in gross profit was principally driven by decreased net sales, partially offset by favorable foreign exchange.
Selling, general and administrative expenses for the quarter were $86 million, a decrease of 22% from selling, general and administrative expenses of $109 million for the same period in 2012. The decrease was principally driven by $12 million of lower intangible asset amortization, a $9 million charge for the Dual Power Inverter Module (“DPIM”) extended coverage program in 2012 and reduced global commercial spending activities, partially offset by $2 million of higher employee stock compensation expense.
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