We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MRC Global (MRC) Q4 Earnings Lag Estimates, Improves Y/Y
Read MoreHide Full Article
MRC Global Inc. (MRC - Free Report) reported lower-than-expected results for the fourth quarter of 2018, with earnings lagging estimates by 30%. This was its third consecutive quarter of weak results.
The company’s adjusted earnings in the reported quarter were 7 cents per share, lagging the Zacks Consensus Estimate of 10 cents. However, the bottom line improved year over year. The company recorded loss of 2 cents per share in the year-ago quarter.
The year-over-year improvement came on the back of sales growth, partially offset by increase in cost of sales and income tax expenses (versus tax benefit recorded in the prior-year quarter).
Healthy Segmental Businesses Drive Revenues
In the reported quarter, MRC Global’s revenues totaled $1,009 million, reflecting year-over-year growth of 11.7%. The improvement was driven by the strengthening of the United States, Canada and International businesses. However, the top line lagged the Zacks Consensus Estimate of $1,015 million by 0.58%.
Based on the company’s product line, revenues from carbon steel pipe, fittings and flanges grew 4.2% year over year to $324 million while that from valves, automation, measurement and instrumentation increased 22.6% to $407 million, and that from gas products improved 20.4% to $136 million. However, sales for general oilfield products decreased 4% to $96 million and that for stainless steel, and alloy pipe and fittings fell 2.1% to $46 million.
Revenues from the Upstream sector were approximately $339 million, increasing 22.4% from the year-ago quarter. Midstream sales totaled $373 million, roughly 0.5% below the year-ago quarter while Downstream sales totaled $297 million, rising 18.3% year over year.
The company has three reportable segments — the U.S., Canada and International. Information on these three segments for the quarter under review is given below:
Sales generated from U.S. segment totaled $778 million, increasing 8.8% year over year. This was driven by strengthening upstream and downstream businesses, partially offset by weakness in Canada operations.
Revenues from the Canada segment grew 11.3% year over year to $79 million on the back of healthy midstream and upstream businesses. However, weakness in downstream sales affected results.
Sales from the International segment increased 29.9% to $152 million on the back of healthy upstream, midstream and downstream businesses.
For 2018, the company’s revenues totaled $4,172 million, increasing 14.4% from the year-ago tally. However, the top line lagged the Zacks Consensus Estimate of $4.18 billion.
Margin Profile Improves
In the quarter under review, MRC Global’s cost of sales increased 10% year over year to $838 million. Adjusted gross profit in the quarter increased 21% year over year to $202 million. Margin expanded 150 basis points (bps) to 20%. Selling, general and administrative expenses were flat year over year to $148 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 46.5% year over year to $63 million while adjusted EBITDA margin increased 140 bps to 6.2%. Interest expenses increased 42.9% year over year to $10 million.
Balance Sheet and Cash Flow
Exiting fourth-quarter 2018, MRC Global had a cash balance of $43 million, up 48.3% from $29 million at the end of the last reported quarter. Long-term debt balance decreased 4.9% sequentially to $680 million.
In 2018, the company used net cash of $11 million for operating activities versus $48 million used in the previous year. Capital spending totaled $20 million versus $30 million in the previous year.
During the year, the company used $125 million for repurchasing shares and $24 million for paying dividends.
In the past 60 days, earnings estimates for each of these stocks improved for 2019. The average positive earnings surprise for the last four quarters was 31.30% for Chart Industries, 6.59% for Dover and 4.96% for Roper.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
Image: Bigstock
MRC Global (MRC) Q4 Earnings Lag Estimates, Improves Y/Y
MRC Global Inc. (MRC - Free Report) reported lower-than-expected results for the fourth quarter of 2018, with earnings lagging estimates by 30%. This was its third consecutive quarter of weak results.
The company’s adjusted earnings in the reported quarter were 7 cents per share, lagging the Zacks Consensus Estimate of 10 cents. However, the bottom line improved year over year. The company recorded loss of 2 cents per share in the year-ago quarter.
The year-over-year improvement came on the back of sales growth, partially offset by increase in cost of sales and income tax expenses (versus tax benefit recorded in the prior-year quarter).
Healthy Segmental Businesses Drive Revenues
In the reported quarter, MRC Global’s revenues totaled $1,009 million, reflecting year-over-year growth of 11.7%. The improvement was driven by the strengthening of the United States, Canada and International businesses. However, the top line lagged the Zacks Consensus Estimate of $1,015 million by 0.58%.
Based on the company’s product line, revenues from carbon steel pipe, fittings and flanges grew 4.2% year over year to $324 million while that from valves, automation, measurement and instrumentation increased 22.6% to $407 million, and that from gas products improved 20.4% to $136 million. However, sales for general oilfield products decreased 4% to $96 million and that for stainless steel, and alloy pipe and fittings fell 2.1% to $46 million.
Revenues from the Upstream sector were approximately $339 million, increasing 22.4% from the year-ago quarter. Midstream sales totaled $373 million, roughly 0.5% below the year-ago quarter while Downstream sales totaled $297 million, rising 18.3% year over year.
The company has three reportable segments — the U.S., Canada and International. Information on these three segments for the quarter under review is given below:
Sales generated from U.S. segment totaled $778 million, increasing 8.8% year over year. This was driven by strengthening upstream and downstream businesses, partially offset by weakness in Canada operations.
Revenues from the Canada segment grew 11.3% year over year to $79 million on the back of healthy midstream and upstream businesses. However, weakness in downstream sales affected results.
Sales from the International segment increased 29.9% to $152 million on the back of healthy upstream, midstream and downstream businesses.
For 2018, the company’s revenues totaled $4,172 million, increasing 14.4% from the year-ago tally. However, the top line lagged the Zacks Consensus Estimate of $4.18 billion.
Margin Profile Improves
In the quarter under review, MRC Global’s cost of sales increased 10% year over year to $838 million. Adjusted gross profit in the quarter increased 21% year over year to $202 million. Margin expanded 150 basis points (bps) to 20%. Selling, general and administrative expenses were flat year over year to $148 million.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 46.5% year over year to $63 million while adjusted EBITDA margin increased 140 bps to 6.2%. Interest expenses increased 42.9% year over year to $10 million.
Balance Sheet and Cash Flow
Exiting fourth-quarter 2018, MRC Global had a cash balance of $43 million, up 48.3% from $29 million at the end of the last reported quarter. Long-term debt balance decreased 4.9% sequentially to $680 million.
In 2018, the company used net cash of $11 million for operating activities versus $48 million used in the previous year. Capital spending totaled $20 million versus $30 million in the previous year.
During the year, the company used $125 million for repurchasing shares and $24 million for paying dividends.
MRC Global Inc. Price, Consensus and EPS Surprise
MRC Global Inc. Price, Consensus and EPS Surprise | MRC Global Inc. Quote
Zacks Rank & Stocks to Consider
With a market capitalization of approximately $1.4 billion, MRC Global currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Zacks Industrial Products sector are Chart Industries, Inc. (GTLS - Free Report) , Dover Corporation (DOV - Free Report) and Roper Technologies, Inc. (ROP - Free Report) . While Chart Industries currently sports a Zacks Rank #1 (Strong Buy), Dover and Roper carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for each of these stocks improved for 2019. The average positive earnings surprise for the last four quarters was 31.30% for Chart Industries, 6.59% for Dover and 4.96% for Roper.
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
This year, the portfolio features a player that thrives on volatility, an AI comer, and a dynamic tech company that helps doctors deliver better patient outcomes at lower costs.
See Stocks Today >>