Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at 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 9 heavy transportation equipment stocks we track reported a strong Q1; on average, revenues beat analyst consensus estimates by 2.4%. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, and while some of the heavy transportation equipment stocks have fared somewhat better than others, they collectively declined, with share prices falling 1.7% on average since the previous earnings results.
Allison Transmission (NYSE:ALSN) Originally making airplane engines during the First World War, Allison Transmission (NYSE:ALSN) now manufactures automatic transmission systems for various industries.
Allison Transmission reported revenues of $789 million, up 6.5% year on year, topping analysts' expectations by 2.2%. It was a mixed quarter for the company, with a miss of analysts' operating margin estimates. On the other hand, revenue and EPS came in ahead of expectations.
David S. Graziosi, Chair and Chief Executive Officer of Allison Transmission commented, "In the first quarter we generated record net sales, driven by strong Global On-Highway demand and strength in our Outside North America Off-Highway and Defense end markets. Robust demand for Class 8 vocational and medium-duty trucks drove record revenue in our North America On-Highway end market, while strength in Asia drove record first quarter revenue in our Outside North America On-Highway end market."
The stock is down 7.5% since the results and currently trades at $74.23.
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Best Q1: Wabtec (NYSE:WAB) Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and its related software for the railway industry.
Wabtec reported revenues of $2.50 billion, up 13.8% year on year, outperforming analysts' expectations by 4.4%. It was an exceptional quarter for the company, with an impressive beat of analysts' organic revenue and earnings estimates.
The stock is up 7.3% since the results and currently trades at $159.35.
Weakest Q1: Cummins (NYSE:CMI) Having produced the first commercially available diesel engine in 1933, Cummins (NYSE:CMI) designs and manufactures engines used in cars, trucks, heavy machinery, and other types of vehicles.
Cummins reported revenues of $8.40 billion, down 0.6% year on year, falling short of analysts' expectations by 0.5%. It was a weak quarter for the company, with a miss of analysts' operating margin and revenue estimates.
Cummins had the weakest performance against analyst estimates in the group. The stock is down 1.2% since the results and currently trades at $280.5.
Oshkosh (NYSE:OSK) Oshkosh (NYSE:OSK) manufactures specialty vehicles for the defense, fire, emergency, and commercial industry, operating various brand subsidiaries within each industry.
Oshkosh reported revenues of $2.54 billion, up 12.2% year on year, surpassing analysts' expectations by 2.2%. It was an exceptional quarter for the company, with an impressive beat of analysts' earnings estimates.
The stock is down 12.5% since the results and currently trades at $106.11.
Federal Signal (NYSE:FSS) Known for its iconic “Q-Siren” in American fire trucks, Federal Signal (NYSE:FSS) produces emergency vehicle lighting and industrial signaling equipment.
Federal Signal reported revenues of $424.9 million, up 10.2% year on year, falling short of analysts' expectations by 0.2%. It was a very strong quarter for the company, with an impressive beat of analysts' earnings and operating margin estimates.
The stock is down 2.1% since the results and currently trades at $83.46.
