Tenaris' Q1 Results: A Steel Giant Holds Steady in a Rocky Landscape

Tenaris (NYSE: TS) has long been the go-to player in the energy infrastructure space, supplying the high-strength steel tubes that keep oil and gas projects moving worldwide. Today, the company released its Q1 2025 results, and while the numbers aren’t perfect, there’s enough here to keep investors excited—if they’re willing to stomach the risks. Let’s dig in.

The Numbers That Matter
First, the headline: Tenaris reported net sales of $2.92 billion, up 3% from Q4 2024 but down a steep 15% from Q1 2024. The sequential growth is encouraging, but the year-over-year drop reflects a sector-wide slowdown in oilfield activity. However, here’s where Tenaris shines: its EBITDA margin held at 23.8%, a testament to cost discipline in a volatile market.

But the real story isn’t just the top line. Tenaris’ net cash position swelled to $4.0 billion, a war chest that gives it flexibility to weather storms. The company also proposed a 38% dividend hike, paying out $0.83 per share annually. For income investors, that’s music to the ears—especially with the stock yielding over 3% today.

Why This Quarter Was a Win
Let’s break down the positives:
1. U.S. Tariffs Paying Off: The 25% import tariffs on steel tubulars, which went into effect earlier this year, are finally working in Tenaris’ favor. The company produces 90% of its North American OCTG domestically, so it’s insulated from price spikes hitting competitors relying on imports. Analysts estimate this could add $0.15 to EPS in Q2 alone.
2. Argentina’s Boom: Tenaris is the undisputed king of Vaca Muerta, the shale field that’s transforming Argentina’s energy sector. Q1 saw rig counts rise to 35 (up from 28 last year), and the company’s pipeline projects for the VM VAMOS project are just getting started. This isn’t just a quarter’s blip—it’s a multi-year tailwind.
3. Dividend Discipline: Tenaris has a history of returning cash to shareholders even in lean times. The proposed $0.56 dividend payout in May will be funded by its $2.2 billion free cash flow, a number that’s held up even amid revenue dips.

The Risks That Keep Me Awake at Night
Now, the flip side:
- Mexico’s Meltdown: Pemex, Mexico’s state oil company, is in freefall. Drilling rigs there have dropped to 23 from 65 in 2024, and production is cratering. Tenaris is exposed here—Mexico accounted for 12% of revenue in 2024. Management says a turnaround won’t happen until H2 2025 at the earliest.
- European Volatility: Sales in Europe plunged 39% quarter-over-quarter as Turkey’s pipeline projects wrapped up. Tenaris is counting on new deepwater contracts (like Shell’s Sparta project) to offset this, but execution is key.
- Trade War Wildcards: The U.S. could still tweak its Section 232 tariffs, potentially capping price gains for Tenaris. Meanwhile, China’s steel exports remain a wildcard in global pricing.

The Bottom Line: Buy the Dip, But Keep an Eye on the Horizon
Here’s why I’m bullish on Tenaris despite the headwinds:
- The dividend is a rock-solid 3.2% yield, backed by a fortress balance sheet.
- Its U.S. production dominance gives it a moat in the OCTG market, where tariffs are now a tailwind, not a threat.
- The Argentina story is real and growing, with rig counts set to hit 42 by year-end—a 40% jump from 2024.

The Takeaway
Tenaris isn’t a “set it and forget it” investment. It requires investors to stay plugged into oil prices, trade policies, and geopolitical moves. But for those willing to do that homework, this stock offers high-single-digit EPS growth potential in 2025—and a dividend that’s literally bankrolled by one of the strongest cash positions in the sector.

Action Plan:
- Buy: If shares dip below $34 (a 10% pullback from recent highs), it’s a bargain.
- Hold: Current shareholders should stick with it—this isn’t a “trade,” it’s a play on energy infrastructure’s long-term growth.
- Sell: Only if the U.S. rolls back tariffs or Mexico’s oil sector collapses further.

Tenaris isn’t for the faint of heart. But in a world hungry for energy and starved for yield, this steel giant just might be the next big thing.

Final Score: Tenaris checks all the boxes for a Buy—strong cash flow, a dividend that’s both safe and growing, and a dominant position in a market that’s only going to get more lucrative. Just don’t sleep through the risks!