Allison Transmission earned $2.90 a share in the third quarter, $0.42 better than expected, on revenue of $1.53B against $1.50B expected. It also raised its full-year 2026 guidance for the second quarter running, building on the increase it made in August.

The raise matters more than the beat, because guidance is management's own forecast of the rest of the year. Allison now expects net sales of $5,975m to $6,075m and net income of $645m to $685m. Adjusted EBITDA is guided to $1,530m to $1,580m, and adjusted free cash flow to $850m to $900m. Net cash from operating activities is guided to $1,110m to $1,140m. Planned capital spending also goes up, to $240m to $260m.

The strength is concentrated. Graziosi, who is chair, president and chief executive, said accelerated North America on-highway truck demand and robust Off-Highway mining momentum drove the quarter. Industrial and agriculture demand stayed subdued amid geopolitical headwinds. The truck market had weighed on Allison's results through 2025, so the turn there carries much of the raised outlook, with mining alongside it.

Allison paid a quarterly dividend of $0.29 a share and repurchased $57m of its stock in the quarter. That leaves $1,068m under its buyback authorization.

Management had flagged an improvement in on-highway demand in the second half. The fourth quarter will show whether it arrives in the numbers.

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