Metallus swings to loss in third quarter, looks to defense to boost activity

Metallus expects activity to pick up in the coming months as aerospace and defense grows.

“We see an increase in order activity into the fourth quarter and early 2025,” said CEO Mike Williams during the company’s third quarter earnings call. “Based on customer requirements, we anticipate an increase in aerospace and defense shipments in 2025. And with the benefit of ongoing investments, we expect to grow aerospace and defense sales to over $250 million in 2026.”

But the third quarter presented a loss for the manufacturer. The Canton, Ohio-based company, which manufactures high-performance specialty metals from recycled metals, reported net sales of $227.2 million and net loss of $5.9 million, or a loss of $0.13 per diluted share.

A year ago, net sales were $354.2 million and net income was $24.8 million, or $0.51 per diluted share.

The loss in sales was primarily due to lower shipments, unfavorable price/mix, and a decrease in raw material surcharge revenue per ton due to lower scrap prices. A year ago, net sales dropped by 36% on lower shipments and a reduction in raw material surcharge revenue per ton as a result of lower scrap and alloy prices.

Metallus reported ship tons fell by 20% quarter-over-quarter to 119,900, driven by lower aerospace and defense and automotive shipments.

Shipments to industrial customers declined 6%, sequentially due to weaker mining and agricultural markets, as well as continued softness in distribution, Williams said.

“On the other hand, we’ve seen a slight uptick in sales from our rail customers, although not enough to offset other declines in this sector,” Williams said.

Automotive shipments declined by 16% sequentially, with the company noting that customers have faced several issues, including ongoing equipment issues, recalls, and unexpected downtime.

During the third quarter, Metallus received $35.5 million from the U.S. Army as part of the previously announced $99.75 million deal to ramp up munitions production in the coming years. As of September, the company had received $45.5 million of government funding and expects additional funding to be provided throughout 2025 and into early 2026 as milestones are met.

Spending on government-funded projects totaled $5.8 million in the third quarter with the equipment expected to be operational in late 2025 and early 2026 to support increasing customer demand, the company reported.