Allison raises 2026 forecast as Q3 profit tops estimates

Allison Transmission (ALSN) said on Nov. 2 that third-quarter adjusted diluted earnings per share rose 59% from a year earlier to $2.90, topping the $2.48 consensus estimate compiled by Finnhub, and it raised its full-year 2026 forecast.

Shares rose 2.6% in after-hours trading as of 4:57 p.m. ET, from a regular-session close of $113.07.

Net sales for the quarter ended Sept. 30 were $1.53 billion, up 121% from $693 million a year earlier. The increase reflects the addition of Allison Off-Highway, a business unit the company acquired from Dana Incorporated on Jan. 1, 2026.

Here's how the company did:

• Revenue: $1.53 billion vs. $693 million a year earlier, above the $1.5 billion estimate
• Adjusted diluted EPS: $2.90 vs. $1.82 a year earlier, against a $2.48 estimate
• Diluted EPS (GAAP): $2.30 vs. $1.63 a year earlier
• Net income: $191 million vs. $137 million a year earlier
• Adjusted EBITDA: $400 million vs. $256 million a year earlier, a margin of 26.1%

Chair, President and Chief Executive Officer David S. Graziosi said the quarter reflected “continued strength across the majority of our end markets, supported by disciplined execution that maximized the benefits of higher volumes.”

Allison Transmission, the company's legacy business, posted record quarterly net sales of $881 million, up 27% from a year earlier. Allison Off-Highway contributed $653 million of net sales in the quarter.

2026 guidance

The company raised its full-year net sales forecast to $5.98 billion to $6.08 billion, from the $5.80 billion to $6.00 billion range it gave on Aug. 3.

It narrowed its net income forecast to $645 million to $685 million, from the $600 million to $700 million range given in August. The net income guidance is subject to completion of purchase price accounting for the Allison Off-Highway acquisition.

Adjusted EBITDA is now expected at $1.53 billion to $1.58 billion, against $1.47 billion to $1.58 billion previously. Adjusted free cash flow is now expected at $850 million to $900 million, up from $745 million to $865 million.

The company expects net cash provided by operating activities of $1.11 billion to $1.14 billion, including about $60 million of one-time cash outlays tied to the Allison Off-Highway acquisition.

Segment results

Allison Off-Highway reported net sales of $653 million and adjusted EBITDA of $83 million, a margin of 12.7%. Its segment operating profit was $32 million.

The company said Construction & Material Handling sales rose across all regions, and Mining demand stayed strong on elevated commodity prices.

Costs and cash

Selling, general and administrative expenses were $142 million, including $4 million of one-time acquisition-related expenses. The company recorded a $17 million charge tied to optimization activities at Allison Off-Highway.

Net cash provided by operating activities was $343 million, up 50% from a year earlier. Adjusted free cash flow was $278 million, up 51%.

The company said it repaid more than $400 million of debt so far this year. It paid $23 million in dividends and repurchased $57 million of common stock in the quarter, leaving $1.07 billion of authorization under its repurchase program.

According to its SEC filings, revenue has risen in each of the last three quarters, from $693.0 million in the third quarter of 2025 to $1.57 billion in the second quarter of 2026.