Profit and revenue tumbled for Allison Transmission Holdings Inc. in its second quarter, as demand in its mining and military markets slipped.
The Indianapolis-based provider of transmissions and propulsion systems reported second-quarter earnings on Monday of $50.5 million, a steep drop from $412.8 million in the same quarter of 2012. Last year’s profit for the quarter was boosted by a one-time $350 million income tax benefit.
On the basis of pre-tax operating income, the two quarters were much more even: $117.7 for the second quarter of this year, and $119.6 million for 2012.
More troublesome was Allison’s dip in revenue—$512.1 million for the most recent quarter, down 8 percent from $559.4 million in the same quarter of 2012.
The decrease was due in large part to lower demand in the United States for equipment used in mining natural gas (sales down 82 percent), reductions in U.S. defense spending (sales down 28 percent), and weakness in markets abroad for Allison’s on-highway products (sales down 4 percent), according to the firm.
On the bright side, net sales in the U.S. for hybrid-propulsion systems for transit buses rose 50 percent from the second quarter of 2012.
Allison CEO Lawrence E. Dewey was encouraged by the results in relation to a significant dip in sales and profit for the first quarter of 2013.
The firm posted revenue of $457.4 million in the quarter, compared with $601.9 million in the same quarter of 2012. Earnings were $27.5 million, compared with $58 million in the same quarter last year.
“In the second quarter [of 2013], 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,” Dewey said in a company release.
Wall Street analysts were not surprised by the second-quarter results. On average, nine analysts polled by Thomson Reuters expected the company to earn 25 cents per share in the quarter. It actually did a smidge better, reporting 26 cents per share.
Allison shares had slipped 1 percent to $23.76 per share in mid-morning trading on Tuesday.