USA Rare Earth Inc. (USAR) shares tumbled 5.25% in pre-market trading on Friday, extending the after-hours decline following the release of the company's disappointing third-quarter financial results. The significant drop comes as investors react to the wider-than-expected losses reported by the rare earth producer.

For the third quarter of 2025, USA Rare Earth reported a staggering net loss of $156.7 million, a dramatic increase from the $1.9 million loss in the same period last year. The company's adjusted earnings per share (EPS) came in at $(0.25), significantly missing the analyst consensus estimate of $(0.10). This represents a 155.1% negative surprise and a 733.33% decrease compared to the $(0.03) per share loss reported in the previous year.

Despite the recent setback, industry experts note that the long-term outlook for domestic rare earth producers remains positive, supported by U.S. government efforts to reduce dependence on Chinese supplies. USA Rare Earth continues to make progress on key projects, including the Round Top development and preparations for commercial-scale production at its Stillwater, Oklahoma magnet facility. However, ongoing volatility in the rare earth sector, influenced by geopolitical tensions and potential Chinese export controls, may contribute to further price fluctuations in the near term.