Allison Transmission secures $97 million U.S. Army contract for Abrams tanks

INDIANAPOLIS - Allison Transmission (NYSE:ALSN), a $6.65 billion market cap company with impressive gross profit margins of 48%, has been awarded a $97 million contract to provide propulsion systems for the U.S. Army’s Abrams Main Battle Tank program, the company announced Monday.

The contract will support the continued production of Allison’s X1100 cross-drive transmission, which has been a core component of the Abrams tank since the platform’s development in the 1970s.

"Allison has been an integral part of the Abrams program from the beginning," said Dana Pittard, Vice President for Defense Programs at Allison Transmission, in a press release statement.

The X1100 transmission integrates steering, braking and gear shifting functions into a single unit, designed to operate in extreme battlefield conditions. The system has undergone various enhancements over the decades to meet evolving military requirements.

As part of the Army’s right to repair initiative, Allison has provided the military’s Anniston depot with enhanced access to diagnostics, components and service protocols. The company has also qualified select service channel members to support cross-drive products.

Allison Transmission, headquartered in Indianapolis, specializes in propulsion solutions for both defense and commercial vehicles. The company has recently invested in electric hybrid propulsion technologies that enable silent mobility capabilities, along with digital diagnostics and modular drivetrain systems.

The firm maintains a global presence with operations in more than 150 countries, including regional headquarters in the Netherlands, China and Brazil, and manufacturing facilities in the United States, Hungary and India. With annual revenue of $3.2 billion and strong financial metrics, InvestingPro analysis suggests the company is currently trading below its Fair Value, presenting a potential opportunity for investors. For detailed insights and 14 additional ProTips about Allison Transmission, including its dividend history and profit margins, check out the comprehensive Pro Research Report available on InvestingPro.

In other recent news, Allison Transmission reported strong second-quarter 2025 earnings, surpassing analysts’ expectations with earnings per share (EPS) of $2.29, compared to the forecasted $2.21. The company also exceeded revenue forecasts, reporting $814 million, which was higher than the anticipated $803.68 million. Following these results, Oppenheimer maintained an Outperform rating on Allison Transmission, with a price target of $115.00. Meanwhile, BofA Securities raised its price target for the company to $84.00, while keeping an Underperform rating.

In addition, Allison Transmission announced a quarterly dividend of $0.27 per share, payable on August 29, 2025, to stockholders of record as of August 20, 2025. The company also revealed a successful integration of its 4500 Rugged Duty Series fully automatic transmission with the Cummins X15N natural gas engine in Kenworth T880 tractors. This powertrain combination has been deployed by Ozinga Renewable Energy Logistics. These developments reflect Allison Transmission’s ongoing strategic initiatives and financial performance.

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