Ampco-Pittsburgh Corporation ((AP)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Ampco-Pittsburgh Corporation’s latest earnings call conveyed a cautiously optimistic sentiment, highlighting significant improvements in earnings per share and adjusted EBITDA. The company celebrated record order intakes and an improved product mix in the Air and Liquid Systems segment. However, these positive developments were tempered by concerns over declining net sales and ongoing challenges with tariffs and supply chain issues. Overall, the positive aspects slightly outweighed the negatives, reflecting a resilient performance amid external pressures.
Earnings Per Share Improvement
Ampco-Pittsburgh reported a notable improvement in earnings per common share, reaching $0.06 for the first quarter of 2025. This marks a $0.20 increase compared to the same period in the previous year, showcasing the company’s ability to enhance shareholder value despite a challenging economic environment.
Adjusted EBITDA Growth
The company’s adjusted EBITDA saw a significant rise, reaching $8.8 million for the quarter, up from $5.1 million in Q1 2024. This growth underscores the company’s operational efficiency and its strategic initiatives to drive profitability.
Record Order Intake for Air and Liquid Systems
The Air and Liquid Systems segment reported its highest order intake in history, driven by robust demand in the nuclear, military, and pharmaceutical markets. This achievement highlights the segment’s strong market position and its potential for future growth.
Improved Product Mix and Segment EBITDA
The Air and Liquid Systems segment benefited from an improved product mix, leading to an increase in adjusted EBITDA to $3.8 million from $2.2 million in the previous year. This improvement reflects the segment’s strategic focus on high-value products.
Net Sales Decline
Despite the positive earnings and EBITDA growth, the company experienced a decline in consolidated net sales, which fell to $104.3 million, a 5% decrease compared to Q1 2024. This decline was attributed to lower sales volumes and unfavorable exchange rates.
Supply Chain and Tariff Concerns
The earnings call raised concerns about potential short-term supply chain disruptions due to tariffs. The company noted some customer reluctance to absorb tariff costs, which could impact future sales and margins.
Decline in Forged and Cast Engineered Products Sales
Sales in the Forged and Cast Engineered Products segment declined to $72.3 million from $77.2 million in the first quarter of 2024. This decrease was primarily due to lower volume and unfavorable exchange rates, posing challenges for the segment.
Forward-Looking Guidance
Ampco-Pittsburgh remains focused on strategic growth, despite the challenges posed by tariffs and market uncertainties. The company plans to pass increased costs to customers to protect margins and anticipates continued growth in sectors such as tool steel and nuclear power. The total backlog increased by 6% year-over-year to $368.5 million, indicating strong future order potential and a positive outlook for the company’s growth trajectory.
In conclusion, Ampco-Pittsburgh Corporation’s earnings call reflected a balanced sentiment, with significant improvements in earnings and order intakes countered by challenges in sales and supply chain issues. The company’s strategic focus on high-value markets and efforts to mitigate external pressures suggest a cautiously optimistic outlook for the future.