NEW YORK Tenaris SA expects North American drilling activity to begin to pick up by the end of the year, while international drilling activity is expected to increase slowly throughout the remainder of 2013, the company said in its first-quarter earnings report.
With a better product mix expected to offset weakening prices for commodity products, the Luxembourg-based tube and pipe maker believes its sales and margins for the rest of 2013 will remain close to levels seen in the first quarter, when the company posted net income of $422.72 million, down 5.7 percent from $448.23 million in the same period last year despite a 2.3-percent increase in sales to nearly $2.68 billion.
Sales volume in the first quarter slipped 0.7 percent to 946,000 tonnes from 953,000 tonnes a year earlier, with seamless sales dropping 1.1 percent to 657,000 tonnes from 664,000 tonnes and welded sales flat at 289,000 tonnes.
The company recorded first-quarter sales of $1.14 billion in North America, its largest market, down 9.9 percent from nearly $1.27 billion a year ago.
Canadas "spring breakup"when land becomes unstable for drilling equipment as winter ice meltsis expected to affect North American sales in the second quarter, the company said, while line pipe sales in Brazil are expected to be crimped in the second half of the year due to delays in project execution.
Tenaris said it expects industrial customers in Europe to continue to be affected by tepid economic activity.