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Vallourec (VK) reported 4Q EBITDA of €254 million, beating the Street’s estimate of €233 million with 4Q EBITDA margins at 16.4%.  First quarter results could be weaker on seasonal impact together with softness in Europe and Brazil’s non-oil and gas activities.

However, the company expects sales to increase 10% in 2012 driven by continued strength in oil and gas operations and the price increases achieved in 2011, but EBITDA margins are likely to decline versus 2011 as start-up costs from new mills in the US and Brazil hurt results.

The company said the new 500,000 tpy OCTG mill in Youngstown, OH is near completion with commercial production expected to start in the summer.  VK aims for a “rapid” ramp-up of the facility to meet growing OCTG demand related to nearby shale plays.

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Weekly domestic raw steel production decreased 0.6% to 1.930 million tons (mt) for the week ending February 25, 2012, but is up 4.8% from the year-ago level.  The highest production since the recession began was 1.945 mt on December 17, 2011, while the lowest was 0.8 mt on December 27, 2008.

The capacity utilization rate declined from 78.6% last week to 78.1% this week, but is still above the 75.3% rate recorded a year ago. The highest capacity utilization since the recession began was last week’s 78.6%, while the lowest was 33.5% on December 27, 2008.

Note: AISI weekly production data only includes real-time input from 50% of producing members; the remainder of the data is a guesstimate based on each company’s prior-month production and therefore the weekly AISI data lags when there are production cuts or increases going on.

Source: AISI and Steel Market Intelligence

The number of active oil and natural gas rigs in the United States fell 0.7% to 1,981 for the week ending February 24, 2012, hitting the lowest count since September 10, 2011.  However, the rig count is up 16.6% from the year-ago level.

The highest weekly rig count in the United States since 1940 was recorded on December 28, 1981, at 4,530; the lowest was recorded on April 23, 1999, at 488.

The number of rigs in Canada this week decreased 0.6% from 705 last week to 701, but was 12.5% higher than last year.

The highest rig count for Canada was 727 on February 3, 2006; the lowest was 29, recorded on April 24, 1992.

Source: Baker Hughes Inc.

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Gibraltar Industries (ROCK) recorded a loss of $(0.22)/share in 4Q, which adjusted to a loss of $(0.17) excluding acquisition-related and exit activity costs, below the Street’s $0.03/share as an increase in expense for equity-based compensation, caused by a spike in ROCK’s stock price in 4Q, contributed to the surprise.

Management expressed optimism that the residential construction market was finally starting to turn around and noted that recent Architectural Billings Index (ABI) readings indicate the nonresidential construction market may have bottomed and might improve “modestly” in 2012.

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Ternium S.A. (TX) reported 4Q EBITDA of $369.6m, beating the Street’s forecast of $346.3m and 4Q 2010 EBITDA of $237m but down 18% sequentially.

Guidance is for operating income to decrease sequentially in 1Q mainly because of higher costs owing to exchange rate changes and higher cost slabs flowing through inventory. Shipments are expected to be stable, with stronger shipments in Mexico in 1Q as North American demand improves offsetting a seasonally slower period in Argentina.

Management noted that it will have more details about the company’s Usiminas investment in March.

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Tenaris (TS) reported 4Q EBITDA of $709.6m, ahead of the Street’s $690.3m and 3Q’s $620.3m, and up 38% from year-ago.  EBITDA margins improved in 4Q as higher volumes led to greater fixed-cost absorption.

Guidance for 1Q was for lower sales and operating income due to seasonal maintenance outages and lower shipments in the Projects segment, although management expects both sales and operating income for full-year 2012 to rise versus 2012 due to in part to an improved product mix.  The company expects 2012 sales of tubular products for demanding applications to grow faster than for standard products as customers undertake investments in more difficult operating conditions.

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L.B. Foster (FSTR) reported adjusted 4Q earnings of $0.62/share, missing the Street’s $0.67/share, as the company’s construction products business saw a sharp drop in 4Q sales.

While the company’s visibility into 2012 is limited for construction markets due to the lack of a new transportation bill, management believes that the non-res construction market has bottomed.  The outlook for the rail segment is brighter due to strong capex spending budgets from North American class 1 railroads in 2012 as well as increased rail traffic.  The company also expects continued growth in its tubular business in 2012.

Our full report is available to subscribers only and provides further thoughts on L.B. Foster’s 4Q earnings report and conference call as well as the implication for the stock and other equities.

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