(Reuters) -Italian steel pipe maker Tenaris posted a surprise 2% rise in third-quarter net sales on Wednesday, as stable drilling activity in North America helped offset weakness in other regions, but warned margins would be hit by the “full impact” of tariff costs.
Net sales for the third quarter ended September 30 increased to $2.98 billion from $2.91 billion a year ago, its first revenue rise in eight quarters. Analysts, on average, had expected sales to dip to $2.85 billion, according to data compiled by LSEG.
The Luxembourg-headquartered company, which makes pipes for the energy industry, said sales of tubular products and services held up well as customers in the U.S. and Canada maintained a more stable level of activity compared to the rest of the market.
Sales in its Argentine fracking and coiled tubing services unit were hit by a lack of drilling activity while Europe suffered due to lower sales to the North Sea, Tenaris said.
Tenaris expects sales in the final quarter to remain close to third-quarter levels but warned that costs and margins will be affected by the full impact of the increase in tariff costs.
Due to rising imports and U.S. tariffs, EU steel producers are operating at only 67% of capacity. The European Commission proposed in October to cut tariff-free steel import quotas by almost half and a 50% duty for excess shipments in a bid to push operating capacity up towards 80%.
The U.S. has targeted steel and aluminium as part of trade measures. In March, a 25% tariff was imposed on most imports of these metals to the U.S., before being increased to 50% for most countries in June.
Earnings before interest, taxes, depreciation and amortization rose 9% to $753 million, helped by a $34 million gain for the return of U.S. anti-dumping deposits paid on imports from Argentina.
(Reporting by Enrico Sciacovelli and Angela Christy in Bengaluru; Editing by Alan Barona)
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