Analyst Note
| Katherine Olexa |Tenaris’ third-quarter results reflect sustained improvements in oil and gas production throughout North America and, more recently, South America. Revenue grew 15% compared with last quarter, as recovering production drove both higher volumes and increased prices. Operating income reached 13% this quarter, in line with 2018 and 2019 averages before the pandemic, as increased production improved the firm’s fixed-cost absorption. We expect margin improvements will persist over the next few quarters as Tenaris continues passing higher input costs onto its customers. We also expect further fixed-cost absorption will benefit margins through 2022, as current capacity utilization remains about 10% below average prepandemic levels.