Tenaris Expects Fourth-Quarter Revenue Growth Near 10%, Sees EBITDA Margin at 25%
Key Facts
Tenaris expects fourth-quarter 2026 revenue to rise about 10%, with most of the increase coming from higher volumes, and an EBITDA margin of about 25%, company officials said on its third-quarter results call held on November 5. The revenue outlook is based mainly on volume growth across most markets, while the CEO said Middle East activity is still recovering in part. The guidance follows third-quarter sales of $3.102 billion, up 5% from the previous quarter and 4% year over year. EBITDA margin in the quarter was 24.4%, compared with 21.9% in the second quarter. The company's shares, trading under the ticker TS, closed at $56.53 on November 5.
Tenaris attributed the improvement in third-quarter sales to stronger demand in North America and higher shipments to Middle East customers. The company said EBITDA margin improved from the previous quarter despite higher raw material, energy and logistics costs. Regional performance reflected mixed demand: pipe sales in North America rose 12% from the second quarter, while they fell 12% in both South America and Europe. In Asia-Pacific, the Middle East and Africa, sales increased 7% over the same period. The company said drilling activity in the Middle East had “started to recover slowly,” as oil producers raised production and exports.
The regional recovery is unfolding amid continued shipping disruptions through the Strait of Hormuz because of the conflict, according to the company's results statement. Tenaris said oil flows had increased through ship-to-ship transfers, while drilling activity in the region remained at the beginning of a gradual recovery. This context distinguishes improved shipments to regional customers from the greater reliance of fourth-quarter growth expectations on higher volumes across multiple markets. The company forecast higher demand and prices for OCTG pipe in North America, alongside additional shipments for offshore projects. It said increased sales of large-diameter welded pipe are boosting revenue but limiting improvement in average selling prices.
For the first nine months of 2026, Tenaris reported sales of $9.169 billion, up 2% from the same period a year earlier, while EBITDA fell 2% to $2.141 billion. Pipe sales rose 1% over the period, driven mainly by higher prices in North America: average selling prices increased 2%, offset by a 1% decline in volumes. In the third quarter, free cash flow was $268 million after capital expenditures of $98 million, and reached $1.2 billion in the first nine months. The company also reported net cash of $3.8 billion as of September 30. These figures put the fourth-quarter outlook in the context of stronger quarterly results, limited year-over-year sales growth in the first nine months and lower EBITDA.
Third-quarter results topped analysts' estimates, with earnings per share beating expectations by $0.17 and revenue reaching $3.1 billion against consensus of $3.03 billion, according to Investing.com. The site said the shares rose more than 3% after the results, attributing the move to the earnings beat. The fourth-quarter guidance focuses on stronger demand and prices for OCTG pipe in North America and shipments for offshore projects, Investing.com reported. Tenaris said the fourth quarter “should establish a new quarterly level for our sales and EBITDA as we enter 2027,” provided there is no major change in the geopolitical context. That condition leaves shipping conditions and activity in the Middle East among the factors shaping the company's operating outlook.