INDIANAPOLIS, IN-Stronger North America on-and-off-highway markets contributed to profit and revenue gains for Q4 and all of 2014, according to Allison Transmission Holdings Inc.

Allison reported a net income of $50.5 million in the final quarter, up from $42.9 million the previous year. Net sales on the fourth quarter were $544 million, an 11-percent increase from the same period in 2013.

“Our fourth quarter 2014 results exceed the guidance ranges we provided to the market on Oct. 2,” said Lawrence Dewey, chairman, president and CEO. “Allison continued to demonstrate strong operating margins and free cash flow while investing in growth opportunities despite challenging conditions in the outside North America end markets.”

For all of last year, Allison had net income of $228.6 million compared to $165.4 a year earlier. North America on-highway end market net sales were up 22 percent from the same period in 2013, principally driven by higher demand for Rugged Duty series models and flat on a sequential basis due to higher demand for Highway Series models, according to the company.

Allison expects 2015 net sales to be in the range of flat to down five percent compared to 2014.

“Our 2015 net sales guidance reflects a cautious approach given the heightened level of uncertainty and the lack of near-term visibility and confidence in the global Off-Highway end markets,” the company said in a statement. “Allison’s 2015 net sales outlook also assumes a continued recovery in the North America on-highway end market, previously considered reductions in U.S. defense spending, continued weakness in the outside North America on-highway end market and lower demand for North America hybrid-propulsion systems for transit bus due to engine emissions improvements and non-hybrid alternatives.”

Allison expects 2015 first quarter net sales to be higher than the same period in 2014.

“The anticipated year-over-year increase in first quarter net sales is principally driven by higher demand in the North America on-highway and off-highway end markets, partially offset by previously considered reductions in defense net sales and lower demand in the North America hybrid-propulsion systems for transit bus end market,” the company said.