Shares of Ampco-Pittsburgh Corporation (AP Quick QuoteAP - Free Report) have lost 13.8% since the company reported its earnings for the quarter ended June 30, 2025. This compares unfavorably with the S&P 500 Index’s 1.2% gain in the same period. Over the past month, the stock plunged 12.8% against the S&P 500’s 2.5% rise.

AP’s Revenue and Earnings Performance

For the second quarter of 2025, Ampco-Pittsburgh reported net sales of $113.1 million, up 1.9% from $110.9 million in the prior-year quarter, with growth in forged engineered products and favorable foreign currency translation offsetting weaker mill roll sales. Despite this modest revenue gain, profitability deteriorated sharply. AP posted a net loss attributable to shareholders of $7.3 million, or $0.36 per share, against net income of $2 million, or $0.10 per share, a year ago. The steep swing into loss primarily reflects a $6.8 million charge for severance, accelerated depreciation, and other exit costs tied to the decision to shutter its U.K. cast roll operations.

Adjusted EBITDA came in at $7.9 million for the quarter, down 21.2% from $10.1 million in the same period last year, with margin contracting to 7.1% from 9.1%. Year-to-date adjusted EBITDA of $16.8 million showed improvement of 10.2% over the prior-year period’s $15.2 million, aided by stronger profitability in the Air and Liquid Processing (ALP) segment.

By segment, Forged and Cast Engineered Products delivered $77.9 million in revenues, up 2.9% year over year from $75.7 million, but lower forged roll demand hurt margins. The ALP segment generated $35.2 million in revenues, down 0.2% from last year’s $35.3 million, yet delivered improved profitability thanks to a stronger product mix and robust demand from the nuclear and military markets.

Ampco-Pittsburgh’s Other Key Business Metrics

The second quarter was marked by significant cost pressures. Costs of products sold increased 4.9% to $91.9 million from $87.7 million a year earlier, driven by higher manufacturing costs relative to pricing and weaker absorption due to lower production rates. Selling and administrative expenses decreased 4.3% to $12.9 million from $13.6 million, while depreciation rose due to accelerated write-downs associated with the U.K. plant closure.

On the financial side, interest expense declined 6.4% to $2.8 million from $3 million, reflecting lower average rates on its revolving credit facility. The company ended June with $9.9 million in cash and $34.2 million of available liquidity under its amended revolving credit facility, which now runs through 2030.

AP’s Management Commentary

CEO Brett McBrayer emphasized that tariff-related volatility significantly weighed on order intake and production in the quarter. McBrayer noted that customers in the roll market paused orders amid uncertainty over U.S. tariff levels, leading to reduced production runs. However, he highlighted progress in winding down the U.K. cast roll facility, which is expected to deliver at least $5 million in annual operating income improvements once complete.

CFO Michael McAuley added that the $6.8 million restructuring charge masked underlying progress, particularly in ALP, which achieved its highest year-to-date adjusted EBITDA in history. Management underscored that the long-term fundamentals for core markets — including automotive, construction and nuclear power — remain supportive.

Factors Influencing Ampco-Pittsburgh’s Results

Ampco-Pittsburgh’s quarterly performance was pressured by several key factors. Tariff-related uncertainty caused customers to delay roll orders, forcing production cutbacks and lower plant utilization. The company also absorbed $6.8 million in charges tied to the closure of its U.K. cast roll operations, including severance and accelerated depreciation, which heavily impacted earnings.

In addition, a shift in product mix — where growth in forged engineered products was offset by weaker roll shipments — compressed margins. These headwinds were only partly mitigated by stronger profitability in the ALP segment, which benefited from improved sales mix and robust demand from nuclear and military customers.

AP’s Guidance

While no explicit numerical guidance was issued, management signaled an improved operating environment in 2026, citing tariff clarity and the benefits of restructuring. They expect at least a $5 million uplift to annual operating income post-U.K. exit.

Ampco-Pittsburgh’s Other Developments

The most significant corporate development was the formal decision to exit the U.K. cast roll business, with operations expected to cease by early 2026. The wind-down is projected to reduce revenue by roughly $20 million to $25 million annually, partly offset by reallocating production to Sweden. Management is also evaluating options for the U.K. facility, including potential sale or redevelopment, though no proceeds are yet included in forecasts.