Analyst Note| Preston Caldwell |
Tenaris reported very improved fourth-quarter results, with revenue up 12% sequentially driven by industrywide activity gains. Adjusted operating margins improved to negative 1% from negative 8% in the prior quarter. This is an impressive bottom-line performance (representing incrementals of 60%), driven by the company's high operating leverage as well as some ongoing cost-cutting. Our fair value estimate and no-moat rating are unchanged following the results.