Net income in Q4 2012 shrank for global pipe and tube producer Tenaris but full year earnings improved. Q4 net income of $350.3 million was down 20 percent from $437.5 million in Q3 2012 and down 18 percent from $426.3 percent in Q4 2011. But for the full 2012 year, Tenaris recorded earnings of $1.7 billion, a 20 percent increase over 2011.
According to the steelmaker, demand for energy continues to increase, despite a weak economic recovery, and oil prices are at levels which should continue to support investment in exploration and production activity during 2013.
In North America, drilling activity in the second half of 2012 was affected by continuing low natural gas prices and lower liquids prices largely resulting from regional infrastructure restraints. In 2013, Tenaris anticipates drilling activity to recover gradually from current levels but to remain, on average, slightly below the level of 2012.
Overall sales growth is expected to be moderate as higher oil and gas sales in Eastern Hemisphere markets are largely offset by lower sales in North America and in European industrial markets.
Net sales of tubular products and services increased 2 percent year-on-year and 4 percent sequentially in Q4. The sequential increase was led by higher demand in the Middle East and South America, partially offset by lower sales in North America. In North America, lower oil and gas activity in the US was partially compensated by higher sales in Mexico and seasonally higher sales in Canada. In South America, sales increased mainly due to an increase in sales of line pipe products in Brazil. In the Middle East & Africa, sales increased following a higher level of OCTG shipments in the Middle East and higher sales to West Africa and the Caspian Sea.
Net sales of other products and services declined 20 percent year-on-year and 5 percent sequentially, mainly due to lower sales of pipes for electric conduit in the US and lower sales of coiled tubing.