American Axle Manufacturing 2025 Q3 Earnings Beats Estimates with 33.33% EPS Surprise and 12.9% Adjusted EBITDA Margin

American Axle & Manufacturing Holdings (AXL) reported Q3 2025 earnings on Nov 7, 2025, delivering a 33.33% EPS surprise above estimates while narrowing its full-year sales guidance. The company’s adjusted EBITDA margin reached 12.9%, driven by operational efficiency, and it revised its 2025 sales target to $5.8B–$5.9B, reflecting confidence in demand for large trucks and SUVs.

Revenue

The total revenue of American Axle & Manufacturing Holdings remained flat at $1.51 billion in Q3 2025, matching the prior year’s $1.50 billion. The Driveline segment led with $1.05 billion in revenue, while the Metal Forming division contributed $454.70 million, collectively sustaining the company’s core automotive supply operations.

Earnings/Net Income

AAM’s EPS declined 12.5% to $0.07 in Q3 2025, down from $0.08 in the prior year, despite adjusted earnings of $0.16 per share exceeding estimates by 33.33%. Net income fell to $9.20 million, an 8.0% decline from $10 million in 2024 Q3, highlighting margin pressures in the metal forming business. The EPS decline, however, signals a negative trend in profitability.

Post-Earnings Price Action Review

The stock price of American Axle & Manufacturing Holdings surged 9.17% during the latest trading day, reflecting strong investor reaction to the earnings beat. Over the past week, shares climbed 5.65%, and the month-to-date gain reached 11.39%, underscoring renewed optimism about the company’s propulsion-agnostic strategy and the Dowlais acquisition. However, the revenue shortfall relative to forecasts tempered some of this enthusiasm, leading to a 2.76% pre-market dip following the earnings report.

CEO Commentary

David Dauch, Chairman & CEO, emphasized AAM’s Q3 2025 performance, noting $1.51B in sales and 12.9% adjusted EBITDA margins, driven by operational efficiency and robust driveline unit performance. He reiterated confidence in the Dowlais acquisition’s transformative potential, despite margin challenges in the metal forming segment. Dauch highlighted onshoring trends and tariff dynamics as tailwinds, expressing optimism about sustained ICE demand and the synergy of combining AAM’s asset base with Dowlais’ capabilities.

Guidance

AAM updated its 2025 guidance to $5.8B–$5.9B in sales and $710M–$745M in adjusted EBITDA, with adjusted free cash flow projected at $180M–$210M. The Dowlais acquisition is expected to close in Q1 2026, pending antitrust approvals in Mexico and China. CapEx guidance remains at ~5% of sales, and the company anticipates deleveraging post-transaction, with no significant debt maturities until 2028.

Additional News

1. M&A Activity: AAM’s proposed $1.5B acquisition of Dowlais, expected to close in Q1 2026, is positioned to strengthen its global footprint and diversify its propulsion-agnostic product portfolio. Antitrust clearances remain pending in Mexico and China.

2. Strategic Focus: CEO David Dauch emphasized balancing ICE and electrification opportunities, with the Dowlais deal targeting enhanced scale and resilience in the shifting automotive supply chain.

3. Guidance Refinement: AAM narrowed its full-year sales forecast to $5.8B–$5.9B, raising the lower end of adjusted EBITDA and free cash flow targets. The company expects to mitigate most incremental tariff costs and incur ~$100M in restructuring and acquisition-related expenses.