Allison Transmission (ALSN) second-quarter results were ugly but expected, with sales dropping by 49% on a quarter-over-quarter basis. Demand for their products dropped in each of their end-markets, except for their Defense segment, which saw strong resiliency by reporting an increase in sales of 14% compared to their prior-year period. The impact of COVID-19 was felt throughout the sector, with many capital expenditures deferred as companies were looking to preserve cash.
With that said, we believe ALSN's decision to keep R&D investment at a constant rate to be positive for their long-term outlook.