Ampco-Pittsburgh Corporation ((AP)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Ampco-Pittsburgh Corporation presented a mixed sentiment, reflecting both achievements and challenges. While the company celebrated strong performance in its Air & Liquid Processing segment and an increase in net sales, it also faced significant hurdles such as the closure of its U.K. plant and a decline in its Forged and Cast Engineered Products segment. The impact of tariffs further complicated the outlook, resulting in a sentiment that was cautiously optimistic but tempered by substantial lowlights.
Air & Liquid Processing Segment Growth
The Air & Liquid Processing segment emerged as a bright spot in the earnings call, reporting a 15% increase in adjusted EBITDA for Q2 2025 compared to the previous year. This achievement marked the highest year-to-date adjusted EBITDA in the segment’s history, with a 36% increase over the prior year, underscoring the segment’s robust performance.
Increase in Net Sales
Ampco-Pittsburgh Corporation reported net sales of $113.1 million for Q2 2025, a 2% increase from Q2 2024. This growth was driven by higher sales of Forged Engineered Products and favorable foreign exchange translation, highlighting the company’s ability to capitalize on market opportunities despite broader challenges.
Improvement Expected from U.K. Plant Closure
The closure of the U.K. plant, while costly, is expected to yield significant benefits. The company anticipates an annual operating income improvement of at least $5 million, suggesting a strategic move to streamline operations and enhance profitability.
Navy Funding and New Equipment
Ampco-Pittsburgh Corporation received approximately $2 million in funding from the U.S. Navy for new manufacturing equipment. This investment is expected to enhance operations at the Buffalo manufacturing location, positioning the company for future growth and operational efficiency.
U.K. Plant Closure and Associated Costs
The closure of the U.K. plant incurred a $6.8 million expense related to employee severance, accelerated depreciation, and professional fees. This decision is expected to reduce revenue by $20 million to $25 million, reflecting the significant impact of this strategic shift.
Decline in Forged and Cast Engineered Products Segment
The Forged and Cast Engineered Products segment faced challenges, with adjusted EBITDA for Q2 2025 down $1.5 million from Q1 2025. The U.S. Forged plant utilization also declined, indicating operational difficulties that the company will need to address.
Tariff Impact on Customer Orders
Uncertainty around tariffs led to a pause in customer orders, causing a shutdown in production to adjust working capital. This situation underscores the external pressures affecting the company’s operations and financial performance.
Net Loss Attributable to Ampco-Pittsburgh
Ampco-Pittsburgh reported a net loss of $7.3 million for the three months ended June 30, 2025, or $0.36 per share. This loss includes the $6.8 million U.K. exit charge, highlighting the financial impact of strategic decisions made during the quarter.
Forward-Looking Guidance
Despite the challenges faced in the second quarter of 2025, Ampco-Pittsburgh Corporation remains optimistic about future earnings. The company expects improved earnings in 2026, driven by strategic pricing, cost control measures, and expanding volumes in the Forged Engineered Products segment. The anticipated $5 million annualized operating income improvement from the U.K. plant closure further supports this positive outlook.
In summary, Ampco-Pittsburgh Corporation’s earnings call reflected a cautiously optimistic sentiment, with notable achievements in the Air & Liquid Processing segment and increased net sales. However, significant challenges such as the U.K. plant closure and tariff impacts tempered the overall outlook. Looking ahead, the company remains focused on strategic initiatives to drive future growth and profitability.