CHICAGO Tenaris SA warned that fourth-quarter sales in North America would be impacted by market uncertainty that is driving a reduction in oil country tubular goods inventories, but offered a more favorable outlook for 2013.
"In spite of the weak economic recovery, demand for energy has remained stable and oil prices are at levels which should continue to support investment in exploration and production activity worldwide during 2013," the Luxembourg-based steel tube and pipe maker said.
Tenaris posted third-quarter net income of $437.5 million, up 19.7 percent from $365.5 million in the same period last year, on sales that increased 6.5 percent to nearly $2.66 billion. Nine-month net income of more than $1.35 billion jumped 35.9 percent from $994.4 million a year earlier on sales that rose 11.8 percent to nearly $8.08 billion.
Stronger third-quarter sales in the Americas helped offset lower demand for industrial products in Europe.
North American sales of tubular products and services totaled $1.26 billion during the quarter, up 24.2 percent from a year earlier, putting nine-month sales at nearly $3.8 billion, up 30.7 percent from $2.91 billion.
In contrast, European sales of tubular products and services fell 7.4 percent to $252.9 million in the third quarter but managed to eke out a 1-percent gain for the first nine months of the year to $799.6 million.
Tenaris expects natural gas prices in North America to rebound from lows seen earlier in 2012, a trend that it said should provide a boost to gas drilling activity in 2013, while drilling in the rest of the world should increase thanks to the development of deepwater and unconventional energy reserves.
Still, Tenaris cautioned that industrial markets, particularly in Europe, were likely to remain weak.