Tenaris SA Earnings - Q4 2025 Analysis & Highlights
Tenaris SA reported stable operational performance in Q4 2025 despite geopolitical challenges and tariff headwinds, with management emphasizing resilience across geographic markets, strategic investments in offshore projects, and disciplined capital allocation while navigating near-term margin pressures from raw material costs and import competition.
Key Financial Results
Q4 2025 sales reached $3.0 billion, up 5% year-over-year and 1% sequentially, driven by resilience in Rig Direct customers in the United States and Canada and resumed fracking and coiled tubing services in Argentina.
Full-year 2025 net sales totaled $12 billion with EBITDA of $2.9 billion and net income of $2 billion.
Q4 2025 EBITDA was $717 million or 24% of sales, down 5% sequentially, reflecting the full impact of 50% Section 232 tariffs on US steel imports.
Average selling prices in the Tubes operating segment decreased 1% year-over-year and were flat sequentially.
Cash flow from operations in Q4 was $787 million, and full-year free cash flow amounted to $2 billion.
Net cash position decreased to $3.3 billion at quarter-end following an interim dividend payment of $300 million, $537 million in share buybacks, and $123 million in capital expenditures.
Business Segment Results
US and Canadian operations demonstrated strong performance with record production levels at Koppel steel shop, Bay City, Hickman, and Ambridge facilities, with 90% of US sales sourced domestically.
Rig Direct service model was strengthened in both the US and Canada, with continued development and rollout of RunReady and well integrity services supporting customer operational efficiency.
International operations showed stability with long-term agreements in place, particularly in premium products and services driven by offshore and Middle East gas and power development.
Latin America segment benefited from resumed fracking and coiled tubing services in Argentina and supply of Vaca Muerta Sur and Duplicar Norte pipelines.
Middle East operations consolidated presence with a long-term agreement for OCTG supply to the Northwest field development in Qatar and record OCTG deliveries to ADNOC in the Emirates.
Venezuela operations resumed with service to Chevron operations following US government intervention, with plans to build up service capability for increased drilling activity.
Capital Allocation
Annual dividend of $0.89 per share or $1.78 per ADR was proposed, including the interim dividend of $0.29 per share paid in November, representing a 7% increase per share compared to the prior year.
Final dividend of $0.60 per share or $1.20 per ADR will be paid on May 20, up 7% compared to the corresponding period of the previous year.
Share buyback program of $1.2 billion was authorized from May 2025 through May 2026, divided into two tranches of $600 million each, with the second tranche approved in October.
$537 million was spent on share buybacks during Q4 2025.
Capital expenditures in Q4 2025 were $123 million, with full-year 2025 CapEx expected to be similar to 2025 levels or potentially lower.
All $2 billion of free cash flow generated in 2025 was distributed to shareholders through dividends and share buybacks.
Industry Trends and Dynamics
US and Canadian markets experienced further oil and gas industry consolidation and productivity improvements despite lower rig counts and extension of Section 232 tariffs to all steel products, including steel bars for seamless pipe operations.
Operators in the US have significantly increased efficiency and productivity, drilling almost the same number of wells with fewer rigs while achieving longer well lengths.
Shale production continues to grow despite declining rig counts, with operators becoming more creative through new technologies in fracking and chemical applications.
Drilled but uncompleted wells inventory has reached bottom levels, reducing a source of activity that previously supported demand.
Major oil and gas companies are seeking new production reserves and looking beyond shales with faster decline curves to deepwater development and exploration in frontier regions.
Deepwater investment projections for 2027 and 2028 show levels in the range of $120 billion, nearly three times higher than the past two to three years.
Mexico's Pemex received government capitalization of MXN 20 billion and is accessing capital markets with MXN 1.7 billion in bonds with government guarantee.
Argentina domestic companies raised more than $4 billion in financing to develop infrastructure and expand production operations in the Vaca Muerta field.
Competitive Landscape
Tenaris faces import competition from Chinese and Southeast Asian welded pipe producers using flat products, which is containing movement in Pipe Logix pricing for welded products.
An Indian company won a tender for a large LNG pipeline project in Argentina, with Tenaris analyzing the offer to determine if it follows trade practices or is exposed to antidumping action.
Tenaris maintains a unique competitive position in Venezuela with historical expertise, human resources familiar with Venezuelan operations, and exclusive service to Chevron, the only major operator currently active in the country.
Tenaris differentiates through product development for complex operations and capacity to support fast-track development with advanced coated line pipe solutions at scale.
Long-term agreements with major customers in the Middle East and other regions provide pricing stability through formulas related to raw materials.
Macroeconomic Environment
Section 232 tariffs on steel products increased to 50%, creating approximately $140 million per quarter in tariff costs that the company is working to offset through increased domestic US steel production.
Hot-rolled coil prices have increased significantly, but welded pipe prices have not followed proportionally due to import competition, creating margin pressure.
Pipe Logix indices for welded pipe are experiencing downward pressure from imports, with management expecting gradual alignment to higher hot-rolled coil levels over time through antidumping actions.
European CBAM and safeguard measures are expected to raise tariffs to 50% and reduce quotas by almost 50%, potentially providing favorable impact on industrial power generation activity in Europe.
Geopolitical volatility and unpredictability characterize the current operating environment, making medium-term forecasting challenging.
Growth Opportunities and Strategies
Offshore projects represent significant growth opportunities with Tenaris delivering casing for Shell Sparta in US deepwater, extending services for ExxonMobil in Guyana, and preparing service base for TotalEnergies' GranMorgu development in Suriname.
Sakarya gas development in the Black Sea represents a major opportunity with production of seamless and welded line pipe and coating planned for the third phase.
Argentina's Vaca Muerta field expansion is driving investment with Tenaris supplying pipelines and expanding fracking and coiled tubing service business, with plans to deploy a third equipment set before year-end.
Venezuela operations are being ramped up with Chevron planning to accelerate rigs and demand for tubulars, with potential for expansion into 2026 and beyond as other majors potentially return.
Environmental sustainability initiatives include bringing a second wind farm into operation in Argentina, with two wind farms now supplying essentially all energy requirements for the electric steel shop in Canada.
Digital integration and efficiency enhancements of globally integrated industrial and supply chain operations continue as key strategic priorities.
Rig Direct service model expansion continues with development of RunReady and well integrity services supporting customer safety and reliability at well sites.
Financial Guidance and Outlook
Q1 2026 is expected to show relative stability in performance and market position with margin and results more or less in line with Q4 2025.
No points are expected to disrupt operations in Q2 2026, with management comfortable forecasting stability through the first quarter.
Tariff impact in Q1 2026 is expected to be slightly lower than Q4 2025 due to operational efficiency improvements and increased domestic US steel production.
Pipe Logix pricing recovery is expected gradually, with management expecting some reaction in Q3 but particularly in Q4 as antidumping actions contain imports.
Offshore revenues in the first half of 2026 are expected to be higher than the second half of 2025, with important backlog execution planned.
Second half 2026 offshore contribution is expected to be at least as positive as the first half, though some awards require FIDs that may be announced toward year-end or in 2027.
Argentina drilling activity is expected to increase in the second half of 2026 following infrastructure investment and industry consolidation, with gradual pickup in Vaca Muerta development.
Venezuela revenue opportunity is estimated at approximately $50 million for 2026, with clear perspective of higher potential into 2027 as other majors potentially return.
US shale market is expected to remain relatively stable in 2026 compared to 2025, with possible slight reduction in oil activity offset by increased gas activity.
Middle East revenues and shipments in Q1 and Q2 2026 are expected to be in line with the last two quarters of 2025, with possible uptick in Saudi drilling activity in Q2 or later in the year.
Mexico activity is expected to remain slow through mid-2026, with better understanding of Pemex development plans expected by mid-year.
Working capital is expected to be neutral for 2026 overall, with increases expected in Q1 mainly driven by accounts receivable.
Capital expenditures for 2026 are expected to be more or less in line with 2025 levels, with potential for some variation based on specific interventions that may emerge during the year.
