Allison Transmission (ALSN) stock is soaring 6.83% in pre-market trading on Friday following the release of its impressive first-quarter 2025 financial results. The company's performance significantly exceeded analyst expectations, demonstrating resilience in a challenging market environment.

The transmission manufacturer reported earnings per share (EPS) of $2.23 for Q1 2025, surpassing the mean analyst estimate of $2.04 and showing a substantial improvement from the $1.90 EPS reported in the same quarter last year. Net income rose to $192 million, up from $169 million in Q1 2024, despite a slight 2.9% year-over-year decrease in revenue to $766 million.

Investors are particularly encouraged by Allison Transmission's improved profitability and strong cash flow. The company's gross profit increased to $378 million from $366 million in the previous year, with gross margin expanding from 46.4% to 49.3%. Additionally, Allison Transmission reaffirmed its full-year 2025 guidance, projecting net sales between $3.2 billion and $3.3 billion, signaling confidence in its market position and strategic initiatives. The company also announced a $1 billion increase in its stock repurchase program authorization, further boosting investor sentiment. These factors combined are likely driving the significant pre-market rally in Allison Transmission's stock price.