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MRC Global (MRC) Q4 Earnings Beat Estimates, Revenues Miss
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MRC Global Inc. (MRC - Free Report) reported fourth-quarter 2023 adjusted earnings of 23 cents per share, which beat the Zacks Consensus Estimate of 11 cents. The bottom line declined 28.1% year over year.
Total revenues of $768 million missed the consensus estimate of $812 million. The top line decreased 11.6% year over year due to lower volume in the Gas Utilities and Production & Transmission Infrastructure (“PTI”) sectors.
Revenues by Product Line
Based on MRC Global’s product line, revenues from carbon pipe, fittings and flanges decreased 16.9% year over year to $231 million. The same from valves, automation, measurement and instrumentation was down 6.2% year over year to $272 million.
Gas product revenues decreased 11% to $170 million. Sales for general products plunged 14.3% to $66 million. The same for stainless steel, alloy pipe and fittings declined 12.1% to $29 million.
Effective first-quarter 2023, MRC combined its Upstream Production and Midstream Pipeline into one sector, which is the PTI sector. Based on the sectors served, revenues from the Gas utilities sector decreased 21% year over year to $253 million, while the DIET sector sales increased 4% year over year to $258 million. Sales from the PTI sector decreased 15% year over year to $257 million.
Revenues by Segment
Sales generated from the U.S. segment (representing 82.4% of revenues) totaled $633 million, down 12% year over year. The decline in sales was due to decreased demand in the Gas Utilities and PTI sectors. Revenues from the Canada segment (3.6%) decreased 39% year over year to $28 million due to weakness in the PTI sector.
Sales from the International segment (14%) increased 4% to $107 million driven by higher revenues from the DIET sector on growth in energy transition activity. This was followed by strength in the PTI sector in the Middle East and the U.K.
Margin Profile
In the quarter under review, MRC Global’s cost of sales decreased 13.5% year over year to $615 million. The adjusted gross profit was down 8.7% year over year to $168 million. The adjusted gross margin was 21.9% compared with 21.2% in the year-ago period.
Selling, general and administrative expenses were up 1.6% year over year to $125 million. Adjusted EBITDA tumbled 27.3% year over year to $48 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, MRC had a cash balance of $131 million compared with $32 million at the end of December 2022. Total debt (including current portion) was $301 million at the end of the fourth quarter.
In 2023, MRC Global generated net cash of $181 million from operating activities against $20 million cash used a year ago. Capital spent on purchasing property, plant and equipment was $15 million, up 36.4% from the year-ago reported number.
In 2023, MRC paid dividends of $24 million, flat year over year.
Zacks Rank & Stocks to Consider
MRC currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2. It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings remained steady in the past 60 days.
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MRC Global (MRC) Q4 Earnings Beat Estimates, Revenues Miss
MRC Global Inc. (MRC - Free Report) reported fourth-quarter 2023 adjusted earnings of 23 cents per share, which beat the Zacks Consensus Estimate of 11 cents. The bottom line declined 28.1% year over year.
Total revenues of $768 million missed the consensus estimate of $812 million. The top line decreased 11.6% year over year due to lower volume in the Gas Utilities and Production & Transmission Infrastructure (“PTI”) sectors.
Revenues by Product Line
Based on MRC Global’s product line, revenues from carbon pipe, fittings and flanges decreased 16.9% year over year to $231 million. The same from valves, automation, measurement and instrumentation was down 6.2% year over year to $272 million.
Gas product revenues decreased 11% to $170 million. Sales for general products plunged 14.3% to $66 million. The same for stainless steel, alloy pipe and fittings declined 12.1% to $29 million.
MRC Global Inc. Price, Consensus and EPS Surprise
MRC Global Inc. price-consensus-eps-surprise-chart | MRC Global Inc. Quote
Revenues by Sector
Effective first-quarter 2023, MRC combined its Upstream Production and Midstream Pipeline into one sector, which is the PTI sector.
Based on the sectors served, revenues from the Gas utilities sector decreased 21% year over year to $253 million, while the DIET sector sales increased 4% year over year to $258 million. Sales from the PTI sector decreased 15% year over year to $257 million.
Revenues by Segment
Sales generated from the U.S. segment (representing 82.4% of revenues) totaled $633 million, down 12% year over year. The decline in sales was due to decreased demand in the Gas Utilities and PTI sectors.
Revenues from the Canada segment (3.6%) decreased 39% year over year to $28 million due to weakness in the PTI sector.
Sales from the International segment (14%) increased 4% to $107 million driven by higher revenues from the DIET sector on growth in energy transition activity. This was followed by strength in the PTI sector in the Middle East and the U.K.
Margin Profile
In the quarter under review, MRC Global’s cost of sales decreased 13.5% year over year to $615 million. The adjusted gross profit was down 8.7% year over year to $168 million. The adjusted gross margin was 21.9% compared with 21.2% in the year-ago period.
Selling, general and administrative expenses were up 1.6% year over year to $125 million. Adjusted EBITDA tumbled 27.3% year over year to $48 million.
Balance Sheet and Cash Flow
Exiting the fourth quarter, MRC had a cash balance of $131 million compared with $32 million at the end of December 2022. Total debt (including current portion) was $301 million at the end of the fourth quarter.
In 2023, MRC Global generated net cash of $181 million from operating activities against $20 million cash used a year ago. Capital spent on purchasing property, plant and equipment was $15 million, up 36.4% from the year-ago reported number.
In 2023, MRC paid dividends of $24 million, flat year over year.
Zacks Rank & Stocks to Consider
MRC currently carries a Zacks Rank #3 (Hold).
Some better-ranked companies from the Industrial Products sector are discussed below:
Parker-Hannifin Corporation (PH - Free Report) presently carries a Zacks Rank #2 (Buy). PH delivered a trailing four-quarter average earnings surprise of 14.4%. In the past 60 days, the Zacks Consensus Estimate for its 2024 earnings has increased 2.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Flowserve Corporation (FLS - Free Report) presently has a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 27.3%. In the past 60 days, the Zacks Consensus Estimate for Flowserve’s 2023 earnings has remained steady.
Applied Industrial Technologies, Inc. (AIT - Free Report) presently carries a Zacks Rank #2. It has a trailing four-quarter average earnings surprise of 10.4%. The Zacks Consensus Estimate for AIT’s fiscal 2024 (ending June 2024) earnings remained steady in the past 60 days.