Allison Transmission Holdings (ALSN) saw its stock price plummet 6.84% in pre-market trading on Thursday, following the release of disappointing third-quarter results and a reduced outlook for 2025. The significant drop comes as investors react to the company's financial performance falling short of expectations.

The transmission manufacturer reported Q3 earnings of $1.63 per diluted share, down from $2.27 a year earlier and below the $1.80 expected by analysts polled by FactSet. Sales for the quarter ended September 30 also declined to $693 million from $824 million in the same period last year, missing the $752.1 million forecast by analysts.

Adding to investor concerns, Allison Transmission lowered its full-year 2025 sales guidance. The company now expects sales to be in the range of $2.98 billion to $3.03 billion, down from the previous outlook of $3.08 billion to $3.18 billion. This reduction in guidance suggests ongoing challenges in the company's market environment. In response to the earnings miss and lowered outlook, several financial institutions, including BofA Global Research and JP Morgan, have cut their price targets for Allison Transmission stock, further contributing to the negative sentiment surrounding the company.