Tenaris reported higher than expected net revenues and earnings but EBITDA missed consensus estimate in the second quarter of 2019. Tenaris’ 2Q19 revenues and shipments came 2% and 3% higher respectively on a quarter-over-quarter basis. Again, a solid price mix (U$S 2.267/t vs. U$S 2.262/t in 1Q19) and sound shipments performance supported sales growth. However, operating income dropped 9% QoQ (U$S 234 M, 12,2% operating margin) driven by an extraordinary event related to higher maintenance costs of a major overhaul in Tenaris’ Mexico facilities and an extraordinary tariff recovery of U$S 15 M in 1Q19. As a result, EBITDA came in at U$S 370 M (EBITDA margin of 19.3%), 5% lower QoQ and below our estimate of U$S 390 M. The bottom line contracted just 1% QoQ to U$S 240 M supported by lower income taxes.
Rating: Market Performer