Allison Transmission Holdings Inc. has reported net sales for the second quarter of $511 million, a 5 percent decrease from the same period in 2014. The company said this decrease in net sales was principally driven by lower demand in the global off-highway and defense end-markets, partially offset by the continued recovery in the North America on-highway end-market, higher demand in the outside North America on-highway end-market and price increases on certain products.
Lawrence Dewey, chairman, president and CEO of Allison Transmission, commented, “Our second quarter 2015 results are within the full year guidance ranges we provided to the market on April 27. Net sales in the North America On-Highway end-market improved on a year-over-year basis for the eighth consecutive quarter. During the second quarter, Allison experienced the unfavorable impact of lower energy and commodity prices in the global off-highway and service parts, support equipment and other end-markets. Given that these end-markets continue to exhibit an elevated level of uncertainty and a dearth of near-term visibility we are updating our full year net sales guidance to a decrease in the range of 6 to 8 percent year-over-year. Allison continued its prudent and well-defined approach to capital allocation during the second quarter by settling $79 million of share repurchases, paying a dividend of 15 cents per share, repaying $54 million of debt and completing a refinancing of the Senior Notes due 2019.”
Gross profit for the quarter was $236 million, a decrease of 1 percent from $239 million for the same period in 2014. Gross margin for the quarter was 46.2 percent, an increase of 170 basis points from a gross margin of 44.5 percent for the same period in 2014. The decrease in gross profit from the same period in 2014 was principally driven by decreased sales volume partially offset by price increases on certain products, favorable material costs and lower incentive compensation expense.
The company said it expects third quarter net sales to be lower than the same period in 2014. The anticipated year-over-year decrease in third quarter net sales is expected to occur due to higher demand in the North America on-highway end-market being more than offset by lower demand in other end-markets.
