Q4 Earnings Highs And Lows: Allison Transmission (NYSE:ALSN) Vs The Rest Of The Heavy Transportation Equipment Stocks
Wrapping up Q4 earnings, we look at the numbers and key takeaways for the heavy transportation equipment stocks, including Allison Transmission (NYSE:ALSN) and its peers.
Heavy transportation equipment companies are investing in automated vehicles that increase efficiencies and connected machinery that collects actionable data. Some are also developing electric vehicles and mobility solutions to address customers’ concerns about carbon emissions, creating new sales opportunities. Additionally, they are increasingly offering automated equipment that increases efficiencies and connected machinery that collects actionable data. On the other hand, heavy transportation equipment companies are at the whim of economic cycles. Interest rates, for example, can greatly impact the construction and transport volumes that drive demand for these companies’ offerings.
The 14 heavy transportation equipment stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 23% since the latest earnings results.
Helping build race cars at one point, Allison Transmission (NYSE:ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Allison Transmission reported revenues of $796 million, up 2.7% year on year. This print exceeded analysts’ expectations by 1.4%. Despite the top-line beat, it was still a slower quarter for the company with full-year revenue guidance missing analysts’ expectations.
David S. Graziosi, Chair and Chief Executive Officer of Allison Transmission commented, “Closing out the year, unprecedented demand for Class 8 vocational vehicles persisted in the fourth quarter of 2024, leading to record full year net sales of $1.8 billion in our North America On-Highway end market. Driven by the realization of our growth initiatives, we achieved decade-high full year net sales in our Defense end market and all-time high full year net sales in our Outside North America On-Highway end market.”
Allison Transmission Total Revenue
The stock is down 25.7% since reporting and currently trades at $84.83.
Offering the first full-electric North American fire truck, REV (NYSE:REVG) manufactures and sells specialty vehicles.
REV Group reported revenues of $525.1 million, down 10.4% year on year, outperforming analysts’ expectations by 6.5%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
REV Group Total Revenue
The market seems happy with the results as the stock is up 5.2% since reporting. It currently trades at $28.69.
Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and related software for the railway industry.
Wabtec reported revenues of $2.58 billion, up 2.3% year on year, falling short of analysts’ expectations by 0.6%. It was a softer quarter as it posted a significant miss of analysts’ EBITDA estimates.
As expected, the stock is down 23.4% since the results and currently trades at $159.22.
With more than half of the heavy-duty truck market using its engines at one point, Cummins (NYSE:CMI) offers engines and power systems.
Cummins reported revenues of $8.45 billion, down 1.1% year on year. This number topped analysts’ expectations by 4.7%. It was a stunning quarter as it also recorded a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ Engine revenue estimates.
The stock is down 22.7% since reporting and currently trades at $269.09.
With its first trailer reportedly built on two sawhorses, Wabash (NYSE:WNC) offers semi trailers, liquid transportation containers, truck bodies, and equipment for moving goods.
Wabash reported revenues of $416.8 million, down 30.1% year on year. This print beat analysts’ expectations by 0.9%. Zooming out, it was a slower quarter as it logged full-year EPS guidance missing analysts’ expectations.
Wabash pulled off the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 39.6% since reporting and currently trades at $9.44.
As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn’t slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.
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