Tenaris Q2 2026 Earnings Report

Tenaris EPS Results

• Actual EPS: $0.95
• Consensus EPS: $0.79
• Beat/Miss: Beat by +$0.16
• One Year Ago EPS: $0.50

Tenaris Revenue Results

• Actual Revenue: $2.97 billion
• Expected Revenue: $2.93 billion
• Beat/Miss: Beat by +$33.46 million
• YoY Revenue Growth: -3.90%

Tenaris Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 8:00AM ET

Tenaris (NYSE:TS) is a global manufacturer and supplier of steel tubular products and related services, primarily serving the oil and gas industry as well as other energy and industrial markets. Its product portfolio centers on seamless and welded steel pipes used for casing, tubing and line pipe applications, alongside a range of specialty and mechanical steel tubes. The company also provides value‑added technical solutions, including premium connections, heat treatment and surface protection, to support drilling, completion and production activities.

Tenaris operates an integrated industrial and commercial network that combines manufacturing, distribution and field services. Its operations span multiple countries with major manufacturing facilities and mills in the Americas and Europe, and a commercial presence that serves customers across North America, Latin America, Europe, the Middle East, Africa and the Asia‑Pacific region. The company emphasizes quality control, proprietary technology and on‑site technical support to meet the specifications and operational requirements of oilfield operators and industrial customers.

Tenaris was established in the early 2000s through the consolidation of the tubular operations of the Techint Group, bringing together long‑standing mills and brands such as Siderca, Dalmine and Tamsa under a single corporate structure incorporated in Luxembourg. Since its formation, the company has pursued a strategy focused on expanding its global footprint, investing in manufacturing efficiency and developing higher‑value products for demanding drilling and production environments.

Tenaris remains closely associated with the Techint industrial group and its long‑time leadership, which has guided the company’s international expansion and technology investments. Its business model combines large‑scale steelmaking and tube production with engineering and field services designed to support customers throughout the lifecycle of upstream and industrial projects.

Tenaris Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Second-quarter results weakened: Sales fell 4% year over year and sequentially to $3.0 billion, while EBITDA declined 12% sequentially to $649 million, pressured by delayed Middle East shipments, lower fixed-cost absorption, and higher raw material and logistics costs.
• Neutral Sentiment: Management expects the third quarter to be broadly similar to the second in revenue and EBITDA margin, with additional pressure from European seasonality, logistics costs, and a lower-margin Sakarya pipeline project.
• Positive Sentiment: The company anticipates a significant fourth-quarter improvement as North American and Argentine unconventional drilling expands, offshore projects ramp up, and price increases begin to offset higher raw material costs. A reopening of the Strait of Hormuz could provide an additional upside from roughly $130 million of deferred Middle East shipments.
• Positive Sentiment: Tenaris approved an interim dividend of approximately $600 million ($0.59 per share, or $1.18 per ADR), supported by its $3.6 billion net cash position and sustained cash generation, while investing in capacity expansions in Canada and the United States.

Presentation

[Operator]

Good day. Thank you for standing by. Welcome to the second quarter Tenaris S.A. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Giovanni Sardagna, investor relations officer. Please go ahead.

[Giovanni Sardagna, Investor Relations Officer at Tenaris]

Thank you, Carmen. Welcome to Tenaris' 2026 second quarter conference call. Before we start, I would like to remind you that we will be discussing forward-looking information in the call, and that our actual results may vary from those expressed or implied during this call. With me on the call today are Gabriel Podskubka, our Chief Executive Officer, Carlos Gómez Álzaga, our Chief Financial Officer, and Guillermo Moreno, President of our U.S. operations. Before passing over the call to Gabriel for his opening remarks, I would like to briefly comment our quarterly results. Our second quarter sales reached $3 billion, down 4% year-on-year and sequentially, mainly reflecting the postponement of shipment to customers in the Middle East due to the effective closure of the Strait of Hormuz for most of the quarter.

[Giovanni Sardagna, Investor Relations Officer at Tenaris]

Average selling prices in our tube operating segment were basically flat compared to the corresponding quarter of last year and sequentially. Our quarterly EBITDA decreased 12% sequentially to $649 million, while our net income decreased 13% to $492 million, mainly due to lower absorption of fixed costs in addition to higher raw material and logistic costs. With operating cash flow of $580 million and capital expenditure of $121 million, our free cash flow for the quarter was $396 million. Following a dividend payment of $606 million in the quarter, our net cash position at the end of the quarter decreased to $3.6 billion. The board of directors approved the payment of an interim dividend of $0.59 per share or $1.18 per ADR, approximately $600 million, that will be paid the 25th of November.

[Giovanni Sardagna, Investor Relations Officer at Tenaris]

I will ask Gabriel to say a few words before we open the call to questions.

[Gabriel Podskubka, CEO at Tenaris]

Thank you, Giovanni. I would like to extend a warm welcome to all of you participating in our call today. Our second quarter results clearly reflect the impact of the Middle East conflict and disruption in the Strait of Hormuz, as well as the consequent impact of logistics and energy cost increases. Even so, they also demonstrate the resilience of our performance based on the strength of our global positioning and the efficiency of our industrial operations. In the Middle East, shipments to Iraq, Kuwait, and Qatar have been postponed as our customers were forced to reduce their operations, and ships are unable to enter the Gulf. This situation will continue until the Hormuz Strait reopens. In Saudi Arabia and the Emirates, however, we were able to continue supply of OCTG to Aramco and ADNOC, who have maintained their drilling operations fairly intact.

[Gabriel Podskubka, CEO at Tenaris]

In other regions of the world, customers are advancing investments to meet the need for energy security and diversification of supply. Drilling activity in unconventional plays is increasing in the United States, in Canada, and also in Argentina. In the United States, we are adding work shifts at our industrial facilities. Our Bay City mill is producing at record levels, and we continue to invest to improve the production capabilities of our copper steel shop and our Ambridge seamless pipe mill. We are also extensively deploying a new high torque wedge connection, which we developed for longer laterals. In Canada, we have launched a major $230 million investment program to increase the effective production capacity of our mill in Sault Ste. Marie. These investments will strengthen our domestic supply capabilities for our Canadian customers.

[Gabriel Podskubka, CEO at Tenaris]

In Argentina, nine high-spec rigs have been added in Vaca Muerta since the beginning of the year, bringing the total to 42 in operation today. In addition, YPF, together with Eni and XRG, are advancing investment plans for the $30 billion Argentina LNG project, for which an FID is expected at the end of this year. We commented last time on the favorable outlook for long cycle deepwater projects. With technology advances and short-term development schedules, these projects have become more cost-competitive and are well suited to support security and diversification of supply. Several FIDs were taken over the last three months. An example is the Cronos project sanctioned by Eni and TotalEnergies, which will take deepwater gas from Cyprus to an LNG facility in Egypt.

[Gabriel Podskubka, CEO at Tenaris]

Tenaris has been supporting Eni in the definition and the supply of the pipeline requirements, and also on the OCTG needed for the four wells of the project. We inaugurated our new service center in Suriname together with TotalEnergies and government officials. From this base, we manage the OCTG supply chain for the GranMorgu project. We also began deliveries of line pipe and coating for the Sakarya project in the Black Sea. Our backlog of offshore projects has increased, and we expect this to be reflected in our sales from the fourth quarter and into 2027. This year, our raw material costs have increased and are impacting our results progressively. We are also increasing prices, and in the fourth quarter, we should see this positive effect in our sales and margins.

[Gabriel Podskubka, CEO at Tenaris]

As we all adapt to a world of increased volatility and supply chain disruption, Tenaris is uniquely positioned to meet the diverse needs of its customers around the world with its global reach, differentiated service and technology, and investments to strengthen its industrial system. With this, we open the floor for questions.

[Operator]

Thank you. Ladies and gentlemen, at this time, we'll open the floor for your questions. As a reminder, star one one to get in the queue and wait for your name to be announced. To remove yourself, press star one one again. Our first question is from Arun Jayaram with JPMorgan Securities. Please proceed.

[Arun Jayaram, Analyst at JPMorgan Securities]

Good morning, Gabriel and team. I was wondering, Gabriel, if you could review the board's decision and move on the dividend. Looks like you're effectively doubling the dividend rate, perhaps shifting a little bit away from the previous cash return strategy that included a mix of buybacks and still a strong dividend previously. Wondered if you could maybe talk a little bit about that move on the dividend, do you view this as sustainable over the long term?

[Gabriel Podskubka, CEO at Tenaris]

Thank you, Arun. Good morning, thank you for your question on this point. As you mentioned, the board has decided to increase the interim dividend to $600 million, doubling, as you mentioned, given the strong balance sheet and sustained cash generation of the company. As you mentioned, the board has favored distribution through dividends, given the simplicity and also as a means of preserving the liquidity of the company shares. That's the rationale for the decision. In terms of sustainability and going forward, I believe that what we can say is that the board remains committed to maintaining a level of shareholder returns that are broadly in line with the past levels, at the same time wishes to maintain financial flexibility in an environment of uncertainty, that can also offer growth opportunities.

[Gabriel Podskubka, CEO at Tenaris]

Regarding sustainability and future, I would say at this time that this will be decided by the board and subject to the approval of a shareholder annual meeting. That said, and based on past practice and our track record and our strong balance sheet, this could be a continuation in the amount of the dividend and the proposal for a payment in May as well.

[Arun Jayaram, Analyst at JPMorgan Securities]

Great. Thank you for that color. My follow-up, and we do appreciate just the uncertainty and the disruption caused by the Middle East conflict on your business there. Gabriel, could you maybe give us a little bit more detail on what your assumptions assume for the second half of 2026 in terms of that disruption? Perhaps maybe if we separate that impact, talk a little bit about how the underlying business is doing, because it sounds like you are expecting a nice improvement or reflection as we think about the fourth quarter in terms of your base business, again, excluding some of the noise associated with the Strait of Hormuz.

[Gabriel Podskubka, CEO at Tenaris]

Sure, Arun. I think it's an important point on the assumption of the Strait of Hormuz reopening or not. This is an important premise. We have changed the premise that we had last quarter, in which we believed, or at least the base case scenario for our guideline was given with a short resolution of Hormuz opening. Today, given the uncertainty that we suffered the last few months, we are changing, not the outlook, but we're changing the premise on which we give our guidance for the second semester of the year. Where we are considering that the opening of the Strait of Hormuz in the short term would be an upside to our scenario. Okay?

[Gabriel Podskubka, CEO at Tenaris]

Last quarter, we mentioned that we have about a business of $100 million of material that is going to the upper part of the Gulf, the one that is compromised due to the inability for ships to transit to Hormuz. This is Iraq, Kuwait, and Qatar. We have even enlarged this backlog. Today, the figure would be $130 million. This is the material that we have for that part of the Middle East that today is out of our forecast. If at any point in time the conflict gets resolved, or navigability in the Strait is restored, it will take us 70 to 90 days to ship this material from our mills and invoice it in the upper part of the Gulf. This is an upside that we will have when and if this happens, this will be a recurrent upside in our forecast.

[Gabriel Podskubka, CEO at Tenaris]

As for now, we have taken this out of our base case scenario. Having said that, if we talk about the outlook, the guidance that we have given is that in the second half of 2026, we expect revenues and EBITDA in line with the first half, with clearly a third quarter that is more affected and more in line with the second quarter. As you are anticipating, an uptick and an interesting jump in the fourth quarter, that it will reflect all the other things that are happening in the world, because the higher price of oil that is driven by the Hormuz disruption is creating the conditions in the U.S., in Canada, in Argentina, and also the strength of the offshore market to start showing, and this has taken some time for these rigs to be added and for our mills to be ramped up.

[Gabriel Podskubka, CEO at Tenaris]

We will see an important jump of volume, and to some extent, some pricing as well, in the fourth quarter of the year. This, in a nutshell, gives a description of the outlook with an important clarification on the premise on the upper part of Hormuz. Because, as you know, UAE and Saudi, the lower part of Hormuz, despite the difficulties, they have been able to continue the drilling activity, and we have been able to continue shipping with additional logistics and effort. This part has been less affected, I would say. Hopefully, this clarifies your point, Arun.

[Arun Jayaram, Analyst at JPMorgan Securities]

Yes. Thank you, sir.

[Operator]

Thank you. Our next question comes from Marc Bianchi with TD Cowen. Please proceed.

[Marc Bianchi, Analyst at TD Cowen]

Thank you. I'd like to follow up on that progression into the fourth quarter here. Maybe, Gabriel, you could help us maybe translate this backlog opportunity of $100 million plus that's being compromised. On a quarterly basis, if we were to sort of remove the effect of the Strait being impassable, I think if I work the math out, your fourth quarter EBITDA should be looking like your first quarter EBITDA in that $730 million range. If none of this stuff with the Strait were happening and you had a normal level of activity in the northern part of the Gulf, what would that look like?

[Gabriel Podskubka, CEO at Tenaris]

I think you're having a very fair assumption on what the fourth quarter from what we're seeing and with all the uncertainty that we are managing. Without this northern part of the Gulf, our projection for the fourth quarter will be pretty much in line with the first quarter, as you're indicating. If this conflict of Hormuz will assure a navigability in the short term, during the next few weeks, we will be able to ship and invoice this additional $130 million within the fourth quarter. It's an upside, it's still a possible upside, and this will clearly increase. You would assume that the margin on the material that we're selling in Iraq, in Kuwait, and in Qatar is premium material, special grade. It has a good average margin compared to the rest of the portfolio of Tenaris.

[Gabriel Podskubka, CEO at Tenaris]

It would be a nice upside addition that we have in the fourth quarter or thereafter. We would need 90 days for this to materialize.

[Marc Bianchi, Analyst at TD Cowen]

Okay. That's very helpful. Then just following back up on the capital return, you'd made the comment about a similar level of capital return to the prior periods with this new program. Just to clarify on that, typically what Tenaris has done is pay an interim dividend that's about one-third of the total dividend, and then in May, we get a dividend that's the remaining two-thirds. I know it's ultimately a board decision, but is that sort of the message that you're looking to deliver here?

[Gabriel Podskubka, CEO at Tenaris]

Yes, Marc, this is exactly. It's not my decision, it's a board decision, but based on past practice, this one-third, two-third has been the track record that the company showed. This is what I was implying.

[Marc Bianchi, Analyst at TD Cowen]

Great. Thank you very much. I'll turn it back.

[Gabriel Podskubka, CEO at Tenaris]

Thanks, Marc.

[Operator]

Thank you. Our next question comes from Sebastian Erskine with Rothschild & Co Redburn. Please proceed.

[Sebastian Erskine, Analyst at Rothschild & Co Redburn]

Yes. Good morning. Good afternoon. Thanks for taking my questions. Just to focus in on kind of North American, two parts to this. North American sales sort of flat quarter-on-quarter. You'd called out sort of U.S. OCTG strength offsetting Canada and Mexico. How much of that flat outcome reflects the fact that U.S. pricing is still lagging the Pipe Logix increases that we've seen? Maybe if you could give some color specifically on how you see that evolving in the second half of the year for North America in terms of price and volume. Just a sort of bigger picture question on U.S. pricing. Obviously, we started to see the cycle turn. You're offsetting the step-up in hot-rolled coil prices.

[Sebastian Erskine, Analyst at Rothschild & Co Redburn]

At what level do you see imported OCTG coming back as a competitive threat again, even net of the Section 232? How much headroom, basically, is there before you begin to approach some level of parity with imports? Would be helpful to get your thoughts on that. Thank you.

[Gabriel Podskubka, CEO at Tenaris]

Thank you, Sebastian. I think on both questions related to U.S. activity and pricing, I would ask Guillermo to add more color, maybe I will come back to the rest of North America on Canada, Mexico, that complements our reporting group. Guillermo on.

[Guillermo Moreno, President of U.S.A. Operations at Tenaris]

Thank you, Gabriel, good morning, Sebastian. In the case of the U.S., let me first start with how we are seeing the market. Far, since the beginning of the conflict in Iran, we have seen activity increase by almost 10%, so an addition of around 50 rigs. Our view is that from now to the rest of the year, another 10 or 15 rigs will be added on top of those. Our expectations is that our shipments to the market will grow in line with the growth of activity, as we capture additional sales because of a higher activity of our customers. Regarding prices, you know that normally our prices go very much in line with the increase of Pipe Logix, with a one-quarter delay, as we have explained in many conference calls.

[Guillermo Moreno, President of U.S.A. Operations at Tenaris]

Since the beginning of the year, we have seen that Pipe Logix has increased around 9%, and in our view, an additional 5% is expected, at least 5%, till the end of the year. Our prices will be reflecting these increases accordingly to the one-quarter delay that I mentioned before.

[Gabriel Podskubka, CEO at Tenaris]

Okay. Regarding Canada, Mexico, we see, to complete the North America view, Mexico, we see it stable with a gradual increase in activity. Pemex has been clearly supported and funded by the higher prices of hydrocarbons in the recent months and the backing of the government. We see that stable and progressing, we see a lot of efforts of the government in Mexico creating incentives and conditions for private companies in different schemes to support with oil and gas activity in Mexico. That is something that in volume will gradually progress. There is also the pricing effect in Mexico that is somehow linked with the international indicators of pricing that are also moving north. Regarding Canada, after a very strong season in the first quarter, it's natural in the second quarter of the year to have a seasonality decrease in volume and activity.

[Gabriel Podskubka, CEO at Tenaris]

This is an area that is also where we have a good promising perspective of increase of drilling activity, both in oil and gas. That's why we have made the decision on the increase of capacity. This is an area where we have a unique setup, and we believe that gradually we will grow our position and revenue in Canada as well. Overall, I think all the three main components of North America are going to start contributing in a positive direction in the quarters to come.

[Sebastian Erskine, Analyst at Rothschild & Co Redburn]

Super. That's helpful. Just very quickly, just to follow up on that point, just in terms of the import level in terms of that's fallen quite aggressively this year. I'm just trying to work out how much room is there in this pricing cycle above which then you bring imports to become more competitive again, even net of the Section 232. I wonder if you maybe just give some thoughts on that parity level with the imports.

[Guillermo Moreno, President of U.S.A. Operations at Tenaris]

Yeah. 2026, as you said, imports have been contained, and we expect to see similar levels in the coming quarters. The main reason of this containment, as you said, are the Section 232 tariff, but also the trade cases filed against unfairly traded imports. Assuming that we have a positive determination in the new trade case, we expect imports to stay contained. For them to start to grow, we will need a more relevant price increase.

[Sebastian Erskine, Analyst at Rothschild & Co Redburn]

Brilliant. Thank you very much. I'll turn it back. Thanks very much for the color.

[Operator]

Thank you. Our next question comes from Isacco Brambilla with Mediobanca. Please proceed.

[Isacco Brambilla, Analyst at Mediobanca]

Hi. Good morning, everybody. Hope you can hear me well. A bag of questions have already been answered, I make just a couple. First, on profitability, is it still correct to assume that the second quarter should represent the weakest quarter of 2026 for you in terms of the EBITDA margin with sequential improvement throughout the second half?

[Gabriel Podskubka, CEO at Tenaris]

Good morning, Isacco. I believe the second quarter and the third quarter will be similar in revenues and pretty much in line on EBITDA margin. I would say that second and third are looking very similar, pretty much in line, and we will see the uptick starting in the fourth quarter and going forward. Second and third, I would categorize them as very similar. As a lower volume and the logistic extra cost and the same components that we explained, that reduction in the second quarter are still present in the third quarter.

[Isacco Brambilla, Analyst at Mediobanca]

Okay. Just to follow up on that, as impacts from lower absorption of fixed cost and higher logistic and transportation, for our third quarter previews, we can take into account the same indication given together with the second quarter. Hundred-

[Gabriel Podskubka, CEO at Tenaris]

Yeah.

[Isacco Brambilla, Analyst at Mediobanca]

-and 140. Okay, thanks.

[Gabriel Podskubka, CEO at Tenaris]

Yeah. Correct. When you go to the fourth quarter, we're seeing a volume that is going to be north of 1 million tons. In that moment, I think the volume will start supporting and helping the absorption of fixed cost in the EBITDA margin that you're looking at.

[Isacco Brambilla, Analyst at Mediobanca]

Brilliant. Thanks.

[Operator]

Thank you. Ladies and gentlemen, as a reminder, if you do have a question, press star one one to get in the queue. Again, that is star one one if you do have a question. One moment, please. We have a question from Jamie Franklin with Jefferies. Please proceed.

[Jamie Franklin, Analyst at Jefferies]

Oh, hi there. Thanks for taking my questions. Just a couple of quick ones. Just on the fracking operations, obviously the operating margin, and your other line came down a little bit in 2Q. Of course, it's small numbers relative to the overall group, but just wondering what a normalized level of margin kind of looks like for this business, going forward. Also, if you can give us an update on the third set of equipment that's expected to be added by year end. Secondly, just on the 3Q impact, could you just dive a bit deeper into the seasonality and product mix effects that you mentioned, please?

[Gabriel Podskubka, CEO at Tenaris]

Sure, Jamie. On the first question, second quarter and third quarter, we will have some white space in our utilization of our two units of fracking in Argentina. On the fourth quarter, we will have our third unit starting operations. We would see an uptick in the level of invoicing of this segment of the business. In terms of our margin and profitability, I would not disclose it for competitive reasons, but I would say that it is a business that is, with an EBITDA ratio, contributing and accretive to the average of Tenaris. On your second point regarding the mix, third quarter, we have seasonality in Europe. Typically, the third quarter, we have our shutdown of our operations in Europe and also many of our customers reduce their level of activity of purchasing. There is a slight reduction on seamless volumes in the third quarter.

[Gabriel Podskubka, CEO at Tenaris]

Related to the additional mix point is that we are starting the shipment of the large Sakarya pipeline, is a welded SAW pipeline from Brazil into Turkey. This started this quarter and will continue for three or four quarters. This has an average price and margin that is below the average of Tenaris. It's a very interesting project, but from that point of view, has a slight effect on the mix. These are the color behind the seasonality mix, of which are particular to the third quarter.

[Jamie Franklin, Analyst at Jefferies]

Very helpful. Thank you.

[Gabriel Podskubka, CEO at Tenaris]

You're welcome.

[Operator]

Thank you. Again, ladies and gentlemen, if you do have a question, simply press star one one to get in the queue. That is star one one if you have a question. As I see no further questions in the queue, I will turn the call back to Giovanni Sardagna for final comments.

[Giovanni Sardagna, Investor Relations Officer at Tenaris]

Well, thank you, Carmen. Thank you all for joining us. We talk soon. Thank you.

[Gabriel Podskubka, CEO at Tenaris]

Thank you.

[Operator]

This will conclude our conference. Thank you for participating. You may now disconnect.

Participants

Executives

• Giovanni Sardagna, Investor Relations Officer
• Gabriel Podskubka, CEO
• Guillermo Moreno, President of U.S.A. Operations

Analysts

• Arun Jayaram, Analyst at JPMorgan Securities
• Marc Bianchi, Analyst at TD Cowen
• Sebastian Erskine, Analyst at Rothschild & Co Redburn
• Isacco Brambilla, Analyst at Mediobanca
• Jamie Franklin, Analyst at Jefferies