Allison Transmission Holdings Inc. (ALSN) shares plummeted 13.55% in the after-hours session on Monday following the release of the company's first-quarter 2026 financial results.

The transmission maker reported adjusted earnings of $2.57 per diluted share, surpassing analyst estimates, while revenue surged 84% year-over-year to $1.41 billion, also beating expectations. The company reaffirmed its full-year 2026 revenue guidance.

Despite the headline beats, investors reacted negatively to underlying concerns within the report. The significant revenue increase was primarily driven by the recently acquired Off-Highway business unit, while net sales for the legacy Allison Transmission unit declined 4% due to lower volumes and unfavorable direct material costs. Furthermore, net income was negatively impacted by $76 million in acquisition-related expenses, including inventory step-up and incremental depreciation costs associated with the Off-Highway deal.