American Axle Manufacturing 2025 Q3 Earnings Net Income Declines 8.0% Despite Revenue Hold

American Axle & Manufacturing Holdings (AXL) reported fiscal 2025 Q3 earnings on Nov 7, 2025, delivering adjusted EPS of $0.16 (beating estimates) but experiencing a 12.5% decline in GAAP EPS to $0.07. Revenue held flat at $1.51 billion year-over-year, while the company narrowed full-year sales guidance to $5.8–$5.9 billion.

Revenue

The total revenue of American Axle & Manufacturing Holdings remained unchanged at $1.51 billion in 2025 Q3, matching the $1.50 billion recorded in 2024 Q3.

Earnings/Net Income

American Axle & Manufacturing Holdings’s GAAP EPS declined 12.5% to $0.07 in 2025 Q3 from $0.08 in 2024 Q3, while net income fell 8.0% to $9.20 million. Adjusted EPS, excluding non-recurring items, rose to $0.16, surpassing the Zacks Consensus Estimate of $0.12 by 33.33%. The EPS decline reflects operational challenges in the metal forming segment and restructuring costs.

Price Action

The stock price of American Axle & Manufacturing Holdings surged 9.17% during the latest trading day, 5.65% over the past week, and 11.39% month-to-date.

Post-Earnings Price Action Review

Following the earnings release, the stock initially dipped 2.76% in pre-market trading due to a revenue shortfall relative to forecasts. However, the stock rebounded sharply, reflecting investor optimism about operational efficiency gains and the Dowlais acquisition. Analysts noted the 11.39% monthly gain as a sign of renewed confidence in AAM’s propulsion-agnostic strategy and margin resilience.

CEO Commentary

David Dauch emphasized AAM’s $1.51 billion in sales and 12.9% adjusted EBITDA margin, driven by driveline efficiency (14.9% margin). He acknowledged metal forming challenges but highlighted onshoring opportunities and the “transformational” Dowlais deal, expected to close in Q1 2026. Dauch reiterated a balanced approach to ICE demand and electrification, with partnerships post-acquisition.

Guidance

AAM updated 2025 guidance to $5.8–$5.9 billion in sales (adjusted EBITDA: $710–$745 million), maintaining a 15.1 million North American production units assumption. The company anticipates $180–$210 million in adjusted free cash flow and $300 million in Dowlais synergies by 2026.

Additional News

1. Dowlais Merger Progress: The European Commission unconditionally cleared the $2.8 billion Dowlais acquisition, now expected to close in Q1 2026. The deal is projected to generate $300 million in annual synergies by 2026, enhancing AAM’s global footprint and electrification capabilities.

2. Guidance Refinement: AAM narrowed full-year 2025 sales forecasts to $5.8–$5.9 billion, reflecting improved production assumptions and tariff cost mitigation. The company also raised adjusted EBITDA guidance to $710–$745 million.

3. Analyst Ratings Shift: RBC Capital upgraded AAM to “Outperform” with an $8 price target, while Stifel maintained a “Hold” but raised its target to $7. Analysts highlighted AAM’s margin resilience and strategic pivot toward electrification as key catalysts.

Guidance

AAM’s 2025 guidance reflects a cautious yet optimistic outlook, with adjusted EBITDA of $710–$745 million and free cash flow of $180–$210 million. The company anticipates deleveraging post-Dowlais close, with capital expenditures at ~5% of sales. For 2026, AAM aims to maintain ICE relevance while expanding electrification partnerships.