Analyst Note| Preston Caldwell |
Tenaris reported first-quarter revenue up 5% sequentially. Adjusted operating margins jumped to 3.7% from negative 0.6% in the prior quarter. However, this bottom-line improvement almost entirely reflected a $40 million reduction in depreciation expense, driven by prior fixed asset write-offs. As such, adjusted EBITDA margins were flat at about 16%. Our fair value and no-moat rating are unchanged following the results.