Algoma Steel Inc. (ASTL) saw its stock price plummet 7.69% in after-hours trading on Tuesday following the release of its disappointing second-quarter 2025 financial results. The steel manufacturer reported significant losses and missed analyst estimates, prompting a sharp sell-off among investors.

The company announced a net loss of $110.6 million for Q2 2025, a stark contrast to the $6.1 million net income recorded in the same period last year. Consolidated revenue dropped to $589.7 million from $650.5 million in the prior-year quarter. Algoma Steel's performance fell short of analyst expectations, with reported quarterly losses of $(0.74) per share missing the consensus estimate of $(0.65) by 13.38%. Similarly, quarterly sales of $426.021 million missed the projected $608.000 million by a substantial 29.93%.

Several factors contributed to Algoma Steel's poor performance, including reduced steel shipment volumes, lower realized pricing, and the impact of Section 232 Tariffs. The company's adjusted EBITDA showed a loss of $32.4 million, compared to a positive $37.7 million in Q2 2024. Steel shipments decreased to 472,056 tons from 503,152 tons year-over-year, while the average realized price of steel, net of freight and non-steel revenue, fell to $1,132 per ton from $1,187. Additionally, tariff costs for the quarter amounted to $64.1 million, contributing to an over-supply in the Canadian market and putting downward pressure on prices. Despite these challenges, Algoma highlighted a positive operational milestone with the first arc and steel production from its new Electric Arc Furnace (EAF) project.