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MRC Global (MRC) Q2 Earnings Miss by a Penny, Revenues Top

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MRC Global Inc. (MRC - Free Report) reported mixed results for second-quarter 2017.

Bottom-Line Performance

Quarterly adjusted earnings came in at 2 cents per share, a penny lower than the Zacks Consensus Estimate. The company had reported an adjusted loss of 21 cents per share in the year-ago quarter.

Top-Line Performance

Sales in the reported quarter came in at $922 million, comfortably surpassing the Zacks Consensus Estimate of $910 million. Notably, quarterly revenues came in 23.6% higher than the year-ago tally. The upsurge was backed by rise in well completion and customer spending activity in the upstream and midstream sectors.  

MRC Global Inc. Price, Consensus and EPS Surprise

 

MRC Global Inc. Price, Consensus and EPS Surprise | MRC Global Inc. Quote

Segmental Details

MRC Global’s second-quarter sales in the U.S. totaled $720 million, up 31% year over year. This upside was stemmed by increased well completion and customer spending activity. Notably, ongoing projects with one major midstream gas transmission customer also supported the upswing.

International sales came in at $133 million, declining 6% year over year. The segmental sales weakened due to lower sales accrued from the company’s upstream and downstream sectors, as well as adverse foreign currency translation impact.

Revenues from Canada came in at $69 million, jumping 28% year over year. The year-over-year improvement was driven by milder spring break-up and increased rig count in the company’s upstream businesses.

Costs and Margins

Cost of sales during the quarter was $773 million compared to $621 million recorded in the year-ago quarter. Gross profit margin in the reported quarter came in at 16.2%, contracting 60 basis points (bps) year over year.

Selling, general and administrative expenses came in at $132 million, as against $135 million recorded in the year-earlier quarter.

Balance Sheet and Cash Flow

Existing the quarter, MRC Global had cash worth $37 million, significantly down from $109 million recorded on Dec 31, 2016. Long-term debt at the end of the second quarter was $402 million compared to $406 million recorded at the end of 2016.

In first-half 2017, MRC Global used $24 million cash from operations, as against $148 million cash generated in the comparable period last year. Capital expenditure during the quarter was $14 million, flat year over year.

Outlook

This Zacks Rank #3 (Hold) company believes that recovering conditions in the oil and gas markets will likely boost revenues and profitability in the quarters ahead.

Stocks to Consider

A few better-ranked stocks in the industry are listed below:

Apogee Enterprises, Inc. (APOG - Free Report) has an average positive earnings surprise of 3.42% for the last four quarters and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AGCO Corporation (AGCO - Free Report) , which also sports a Zacks Rank #1 at present, generated an average positive earnings surprise of 39.70% over the trailing four quarters.

Deere & Company (DE - Free Report) carries a Zacks Rank #2 (Buy) and has a remarkable average positive earnings surprise of 70.41% for the past four quarters.

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