Allison Transmission Q3 Review: Decent Performance, Now Margins Need To Improve

Allison Transmission delivered a double beat in Q3, with revenue up 121% y/y and EPS exceeding estimates, driven by the Dana acquisition. Margins declined significantly due to the lower profitability of the acquired off-highway segment, but cash flow and balance sheet remain solid. Management raised guidance, highlighted $120M+ in expected synergies for 2027, and pointed to volume, cost, and defense tailwinds.