Shares of Ampco-Pittsburgh Corporation (AP Quick QuoteAP - Free Report) have lost 3% since the company reported earnings for the quarter ended March 31, 2026, against the S&P 500 Index’s 1.3% gain over the same period. Over the past month, however, the stock has rallied 25.1%, significantly outperforming the S&P 500’s 7.3% rise.

Ampco-Pittsburgh’s Earnings Snapshot

Ampco-Pittsburgh reported first-quarter 2026 net sales of $108.3 million compared with $104.3 million, up 3.9% year over year, driven by strong demand in its Air and Liquid Processing (ALP) segment. Net loss attributable to Ampco-Pittsburgh was $0.9 million, or 4 cents per share, against net income of $1.1 million, or 6 cents per share, in the year-ago quarter. Adjusted EBITDA declined 9.2% to $7.9 million from $8.8 million, while adjusted EBITDA margin contracted to 7.4% from 8.4%.

Within segments, Forged and Cast Engineered Products (FCEP) revenue fell 2% to $70.8 million from $72.3 million, while ALP revenue climbed 17.3% to $37.5 million from $31.9 million. Adjusted operating income in FCEP dropped 31% to $5.7 million from $8.3 million a year earlier, whereas ALP posted record adjusted operating income of $5.7 million, up 52% year over year from $3.8 million.

AP’s Backlog and Orders Improve

AP exited the quarter with a backlog of $345.5 million compared with $328.9 as of Dec. 31, 2025, supported by approximately $124 million in first-quarter bookings. Management said the increase was led by record order activity in the ALP segment, fueled by strong demand from power generation and defense markets.

ALP continued to benefit from rising demand tied to data centers, gas turbines and nuclear infrastructure. Management highlighted that commercial pumps used in gas turbines and nuclear heat exchangers experienced strong demand trends, while U.S. Navy-related business also remained robust. Ampco-Pittsburgh noted that new manufacturing equipment installed in 2024 has already increased pump production capacity, with additional Navy-funded equipment expected to become operational during the second quarter.

In the FCEP business, management said order trends improved sequentially after softness in late 2025 and early 2026. Executives cited recovering demand for large forged rolls and stronger work roll orders heading into the second and third quarters.

Factors Weighing on Ampco-Pittsburgh’s Quarterly Results

Management attributed the weaker year-over-year profitability primarily to temporary timing and product mix issues in the FCEP segment. According to executives, uneven shipments involving blended products from Sweden and China created a less profitable mix during the quarter, while lower shipments of higher-margin large rolls in the United States also pressured margins.

Tariff uncertainty was another factor affecting customer purchasing decisions in late 2025 and early 2026. Management said some customers delayed purchases of higher-margin products until tariff conditions stabilized. In addition, higher-cost inventory produced during late-2025 shutdowns negatively impacted first-quarter profitability.

The quarter also reflected the impact of a receivable write-down related to the 2025 closure of the U.K. facility. AP recorded an $875,000 deconsolidation charge tied to the estimated recovery from the U.K. insolvency process.

Despite those headwinds, management indicated that many of the issues were temporary. During the earnings call, executives estimated that timing-related factors reduced EBITDA by close to $3 million in the quarter and said those effects should reverse in the coming periods.

AP’s Liquidity, Cash Flow and Pension Update

Ampco-Pittsburgh ended the quarter with cash and cash equivalents of $9.2 million and total liquidity of $30.8 million. Operating cash flow improved to $1.7 million against a cash outflow of $5.3 million in the prior-year period. Free cash flow improved to $(1.7) million from $(7.2) million a year ago, reflecting better working capital management. Net debt stood at $124.9 million at quarter-end compared with $120.1 million as of March 31, 2025.

AP also announced that its U.S. defined benefit pension plan achieved fully funded status as of Feb. 9, 2026. Management said the improved pension position allowed the company to shift toward a more conservative investment strategy.

Ampco-Pittsburgh’s Outlook

Management expressed optimism for the remainder of 2026 and into 2027, citing improving market conditions, stronger order trends and benefits from restructuring actions completed in late 2025.

Executives said Ampco-Pittsburgh expects a more favorable product mix and improved conversion over the balance of the year. In FCEP, management pointed to improving steel industry conditions, infrastructure spending and reshoring activity as supportive demand drivers. Tariffs were also described as beneficial for certain forged engineered products by improving pricing conditions and supporting margins.

AP reiterated expectations for annual adjusted EBITDA improvement of $7 million to $8 million from restructuring actions, including the closure of the U.K. facility and operational optimization initiatives.

AP’s Other Developments

Ampco-Pittsburgh continued executing restructuring and operational realignment initiatives during the quarter. The company is ramping production at its Sweden facility following the closure of its U.K. cast roll plant in 2025. Management said the Sweden operation posted more than 20% sales growth year over year and is expected to deliver additional efficiency gains over time.

Management also highlighted industry consolidation opportunities. During the quarter, executives noted that one European cast roll competitor entered receivership and a South American competitor exited parts of the forged and cast roll market, which management believes could create market share gains for Ampco-Pittsburgh in both Europe and the Americas.