Ampco-Pittsburgh (AP 0.68%), a maker of engineered products for steel and process industries, released its earnings for the second quarter of fiscal 2025 on August 12, 2025. The most important news in the release was the net loss (GAAP), which reversed from a profit in the prior year due to a one-time cost of exiting the U.K. cast roll operations. Revenue (GAAP) edged up to $113.1 million compared to $111.0 million in the prior year. In the absence of Wall Street analyst estimates, these actual results serve as the key benchmark for performance. Management reported that despite improvements in certain areas, ongoing challenges in global steel demand and trade policy volatility hurt the bottom line. Operating margins and profits declined, with restructuring costs weighing heavily on results.
| Metric | Q2 2025 | Q2 2024 | Y/Y Change |
|---|---|---|---|
| Revenue (GAAP) | $113.1 million | $111.0 million | 1.9% |
| EPS (GAAP, Diluted) | ($0.36) | $0.10 | N/A |
| Adjusted EBITDA (Non-GAAP) | $8.0 million | $10.1 million | (21.0 %) |
| Adjusted EBITDA Margin (Non-GAAP) | 7.06 % | 9.13 % | (2.07 pp) |
| Net Loss (GAAP) | ($6.7 million) | N/A | N/A |
Company Overview and Focus
Ampco-Pittsburgh (AP 0.68%) produces engineered industrial equipment, with its main business lines centered on forged and cast rolls, open die-forged products, and custom-engineered heat exchange coils. The company operates two segments: Forged and Cast Engineered Products (FCEP) and Air and Liquid Processing (ALP). FCEP supplies vital parts to steel mills and related industries worldwide. ALP specializes in products for energy, military, and pharmaceutical end markets.
Recently, the company has focused on operational efficiency programs and restructuring, including the planned exit from its U.K. cast roll business to combat persistent losses. Key success factors include demand for steel, adaptation to geopolitical developments affecting trade, maintaining strong customer relationships, and managing inflation and supply costs, especially in ALP’s markets.
Quarterly Highlights and Financial Developments
Total sales (GAAP) rose slightly, but margin trends moved in the opposite direction. The FCEP segment, which delivers rolls and engineered products for the steel and extrusion markets, saw its GAAP revenue inch higher to $77.9 million, but adjusted operating margin (non-GAAP) slipped from 12.96% in the prior year to 8.68%. Management explained that "Margins for the FCEP segment were adversely affected by higher manufacturing costs relative to base pricing and variable-index surcharges passed through to customers during the quarter, a weaker sales mix and lower manufacturing cost absorption."
Another major concern is the sequential 9% drop in FCEP backlog from March 31 to June 30, 2025, suggesting wavering demand as customers hesitate amid uncertainties over steel tariffs. As CEO Brett McBrayer described, Backlog in the Forged and Cast Engineered Products segment at June 30, 2025 declined 9% from March 31, 2025 as roll customers began a pause of orders to await less uncertainty surrounding tariffs. While the company points to recent E.U. trade deals as a step forward, the near-term impact on order flow is clear.
This quarter’s results were also marked by significant one-time costs. A $6.8 million charge related to severance, accelerated depreciation, and associated costs of closing the U.K. cast roll operation drove overall results negative for the period. Management estimates operating income will improve by at least $5 million per year following the U.K. exit. The company also booked a $0.7 million benefit from employee retention tax credits.
While the ALP segment’s sales remained essentially flat at $35.2 million, the segment’s adjusted margin improved to 11.16% (non-GAAP) as better product mix helped shore up earnings. This demonstrates ALP’s resilience, even as broader market signals remain uncertain for the company’s larger FCEP segment. Notably, inflation and supply chain pressures in ALP are being partly managed through selective price increases.
Looking Ahead and Management Commentary
No explicit financial guidance or outlook was given for the remainder of fiscal 2025. However, management stated that following the U.K. cast roll facility exit, it expects annual operating income will improve by at least $5 million. The release further noted that With less uncertainty on trade policy now with the recent E.U. deal, we expect an improved environment in 2026 after our U.K. exit.”
Investors will likely keep a close eye on order trends in the FCEP segment, upcoming cost savings from restructuring, and the company’s ability to manage cost inflation and supply constraints in ALP. The effect of trade policy changes and customer order patterns will be critical to watch in upcoming quarters, as will any updates on margin or backlog recovery.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
