It has been about a month since the last earnings report for MRC Global (MRC Quick QuoteMRC - Free Report) . Shares have lost about 2.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is MRC due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

MRC Global’s Q3 Earnings Surpass Estimates, Revenues Down Y/Y

MRC Global reported third-quarter 2024 adjusted earnings 22 cents per share, which beat the Zacks Consensus Estimate of 18 cents. However, the bottom line declined 31.3% year over year.

Total revenues of $797 million matched the consensus estimate. The top line decreased 10.3% year over year due to lower volume of sales in the Gas Utilities, Downstream, Industrial and Energy Transition (DIET) and Production & Transmission Infrastructure (PTI) sectors.

Revenues by Product Line

Based on MRC’s product line, revenues from carbon pipe, fittings and flanges were down 27.4% year over year to $204 million. Revenues from valves, automation, measurement and instrumentation were down 6.9% year over year to $285 million.

Gas product revenues increased 1.6% year over year to $194 million. Sales of general products fell 14.3% to $60 million. Sales of stainless steel, alloy pipe and fittings increased 35% to $54 million.

Revenues by Sector

Effective second-quarter 2023, MRC combined its Upstream Production and Midstream Pipeline into one sector, which is currently the PTI sector.

Based on the sectors served, revenues from Gas Utilities decreased 6% year over year to $295 million, while DIET sales inched up 11% to $248 million. Sales from the PTI sector decreased 14% year over year to $254 million.

MRC Global’s Revenues by Segment

Sales generated from the U.S. segment (representing 80.8% of revenues) totaled $644 million, down 14% year over year. The downtick was due to reduced demand in the Gas Utilities, DIET and PTI sectors.

Revenues from the Canada segment (3.3%) fell 32% year over year to $26 million due to weakness in the PTI sector.

Sales from the International segment (15.9%) grew 21% year over year to $127 million, driven by higher revenues from the PTI and DIET sectors.

Margin Profile

MRC Global’s cost of sales declined 9.7% year over year to $637 million. The adjusted gross profit was down 12.3% year over year to $166 million. The adjusted gross margin was 20.8% compared with 21.3% in the year-ago period.

Selling, general and administrative expenses were down 2.4% year over year to $123 million. Adjusted EBITDA decreased 71.8% year over year to $48 million.

MRC Global’s Balance Sheet and Cash Flow

Exiting the third quarter, MRC had a cash balance of $62 million compared with $131 million at the end of December 2023. Total debt (including the current portion) was $433 million at the end of the quarter.

In the first nine months of 2024, the company generated net cash of $197 million from operating activities compared with $92 million in the year-ago period. Capital spent on purchasing property, plant and equipment was $23 million, up 130% on a year-over-year basis.

In the first nine months of the year, dividends paid on preferred stock were $18 million, flat year over year.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended downward during the past month.

The consensus estimate has shifted -41.67% due to these changes.

VGM Scores

At this time, MRC has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise MRC has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

MRC is part of the Zacks Steel - Pipe and Tube industry. Over the past month, Valmont Industries (VMI Quick QuoteVMI - Free Report) , a stock from the same industry, has gained 0.2%. The company reported its results for the quarter ended September 2024 more than a month ago.

Valmont reported revenues of $1.02 billion in the last reported quarter, representing a year-over-year change of -2.9%. EPS of $4.11 for the same period compares with $4.12 a year ago.

Valmont is expected to post earnings of $3.67 per share for the current quarter, representing a year-over-year change of +15.4%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Valmont. Also, the stock has a VGM Score of A.