Tenaris SA Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Tenaris SA's Q3 2025 earnings call highlighted resilient sales in the US and Canada, progress in offshore projects, and increased energy production in Argentina, while addressing tariff impacts and shareholder returns.
Key Financial Results
Q3 2025 sales reached $3 billion, up 2% year-on-year, but down 3% sequentially.
The decrease mainly reflected lower sales to the North Sea and lower shipments for offshore line pipe projects in the Middle East, partially offset by resilient sales to Rig Direct customers in the US and Canada.
Average selling prices in the tubes operating segment decreased 1% compared to the corresponding quarter of last year, and 1% sequentially.
EBITDA for the quarter was up 3% sequentially to $753 million with an EBITDA margin for the quarter at 25%.
EBITDA included a $34 million gain from the return of US anti-dumping deposits on OCTG imports from Argentina.
Without the one-off gain, EBITDA would have been $719 million, or 24% of sales.
Operating cash flow was $318 million, and capital expenditure was $185 million, resulting in a free cash flow of $133 million for the quarter.
After share buybacks for $351 million, the net cash position declined to $3.5 billion at the end of the quarter.
An interim dividend of $0.29 per share or $0.58 per ADR was approved, to be paid on November 26th.
The interim dividend per share is up 7% compared to last year.
Business Segment Results
Maintained sales levels in the US and Canada despite low drilling rig activity due to the strength of the customer portfolio.
Increased production in the United States and Canada to ensure reliable supply of high-quality products, given high tariff rates and trade restrictions.
90% of US sales of OCTG are produced in the United States, with the remaining 10% mainly imported for special applications.
The production line for boiler and heat exchanger pipes in Europe is operating at full capacity.
Capital Allocation
Share buybacks totaled $351 million in Q3 2025.
An interim dividend of $0.29 per share (or $0.58 per ADR) was approved.
Capital expenditure for the quarter was $185 million.
The company distributed a cash return of around 11% to shareholders for the year.
Industry Trends and Dynamics
Overall drilling rig activity is low in the United States and Canada.
Offshore projects, especially complex deepwater developments, continue to move forward.
Demand for electric energy is accelerating around the world.
China continues to increase its level of steel exports.
Europe is taking action to contain steel imports with the strengthening of its steel safeguard measures.
Competitive Landscape
Tenaris has built a unique industrial and commercial position around the world with competitive differentiation in key markets and efficient industrial performance.
The company's uniquely flexible global industrial system allows it to produce locally in many regions while maintaining high quality.
Tenaris is gaining some market share, but the reality is that its clients are gaining market share for different reasons in the space of North America.
Macroeconomic Environment
High tariff rates and trade restrictions are present in the United States and Canada.
The Argentina election is marking an important turning point.
There has been a substantial reduction in the country risk in Argentina, almost 400-basis point down.
The US extended steel safeguard measures, which should benefit Tenaris' operation in Europe.
Growth Opportunities and Strategies
Increasing production in the United States and Canada to assure reliable supply of high-quality products to customers.
Expanding the scope of Rig Direct service in the Montney shale region, including opening a new service yard in British Columbia.
Gearing up for the supply of coated seamless riser and flow lines and welded line, export line and casing for TPAO Sakarya deepwater development in the Black Sea.
Increasing energy production in Argentina, including starting operation at a new 95-megawatt wind farm.
Reducing carbon emissions and improving the sustainability of operations.
Financial Guidance and Outlook
Expects sales in the next quarter to be close to the level seen in Q3.
EBITDA is expected to be lower in the range of single digits due to the impact of tariffs in the cost of sales.
Margins are expected to be in the range between 20% and 25%, slightly lower than in Q3.
The company expects to see the full effect of the additional 25% tariffs implemented in June during the fourth quarter of the year.
The company anticipates some increase in the number of rigs operating in Argentina and gradually will see possibly something more during 2026 and 2027, when more substantial programs will proceed.
