Tenaris slips, first quarter above estimates not enough, cautious outlook weighed

(Il Sole 24 Ore Radiocor) - Downtrending session for Tenaris which, started immediately at the tail end of the FTSE MIB, came in down more than 6% at a low of EUR 24.82 per share, back to mid-April levels. First-quarter accounts above expectations were not enough to push the market towards purchases, which looked on the one hand at the cautious outlook for the second quarter (although with an expected recovery in the second half of the year) and on the other hand at the change at the helm, with Paolo Rocca who, after 24 years as CEO (he had been in office since 2002), passed the baton to Gabriel Podskubka, former chief operating officer of the group, while continuing to hold the position of chairman of the board of directors.

The global producer and supplier of pipes and services for oil and gas exploration and production "started the year on a positive note" and saw profit grow by 9% and revenues by 6% compared to the same period last year, in both cases exceeding analysts' forecasts, despite the conflict in the Middle East and the closure of the Strait of Hormuz. "First quarter results are above expectations, but the second period of the year will be impacted by the situation in the Middle East. However, the outlook remains constructive,' say Intermonte analysts.

The market's doubts relate to the fact that, for the second quarter, Tenaris expects 'revenues to be impacted by lower shipments to the Middle East' and 'margins to be impacted by higher logistics costs, as well as lower absorption of fixed costs'. And they also concern the fact that the companyhas given no quantitative guidance on the near future: Tenaris, Barclays' experts explain, 'gave no indication on sales or margins for the second quarter (consensus projected EBITDA is currently $674 million compared to $735 million in the first quarter), but merely stated that sales will be impacted by the decline in shipments to the Middle East and that the company will incur higher logistics costs'.

However, for the second half of 2026, it is expected that there will be 'a recovery in sales and margins, assuming the Strait of Hormuz is reopened in the short term'. A view that, according to Jefferies analysts, 'nevertheless remains very cautious'. For the second quarter, the consensus expects revenues of $2.93 billion (-5% quarter-on-quarter) and a margin of 23% (-70 basis points quarter-on-quarter).