Tenaris SA (NYSE: TS) reported Q2 EPS of $0.29, $0.68 worse than the analyst estimate of $0.97. Revenue for the quarter came in at $3.32 billion versus the consensus estimate of $3.27 billion.

Market Background and Outlook

The outlook for oil demand and supply remains solid even if the announced rollback of OPEC+ voluntary production cuts has introduced some uncertainty.

OCTG imports into the United States have remained high through the year, while oil and gas drilling activity is being affected by ongoing industry consolidation, low natural gas prices and high financing costs for smaller operators. OCTG inventories have risen and prices continue to fall.

Political and economic volatility is affecting drilling activity in Mexico and Argentina, and there are delays in defining the pipeline infrastructure investment required to further develop the prolific Vaca Muerta shale.

In the rest of the world, demand from offshore developments and for gas drilling associated with LNG projects remains supportive going into 2025.

In the third quarter, our sales and EBITDA will be affected by lower activity in the United States and Latin America and the extended decline in OCTG prices in the Americas. As anticipated, we will have maintenance stoppages at many of our mills, including the installation of a new furnace at our Siderca steel shop.

Considering this environment, we are acting to reduce costs, increase competitiveness and align our industrial system.

For earnings history and earnings-related data on Tenaris SA (TS) click here.