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.
Why Is MRC Global (MRC) Up 2.3% Since Its Last Earnings Report?
Read MoreHide Full Article
A month has gone by since the last earnings report for MRC Global Inc. (MRC - Free Report) . Shares have added about 2.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MRC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Highlights
MRC Global Inc. reported lower-than-expected results for fourth-quarter 2017.
Bottom-Line Performance
MRC Global reported an adjusted loss of 1 cent per share in the reported quarter, as against the Zacks Consensus Estimate of 3 cents per share. The company had recorded a loss of 18 cents per share in the year-ago quarter.
Adjusted earnings for 2017 came in at 27 cents per share, as against the adjusted loss of $1.10 per share recorded for full-year 2016.
Top-Line Performance
Sales in the reported quarter came in at $903 million, missing the Zacks Consensus Estimate of $912 million. However, quarterly revenues climbed 25.6% year over year. The upside primarily stemmed from improved North American midstream and upstream businesses.
Segmental Details
MRC Global’s fourth-quarter salesin the United States totaled $715 million, up 30% year over year. This upside was driven by increased midstream gathering and transmission, well completions and downstream project deliveries.
International sales came in at $117 million, up 3% year over year. The upswing was supported by increased upstream sector sales and favorable foreign currency-translation impact.
Revenues from Canada came in at $71 million, up 29% year over year. The year-over-year improvement was backed by solid upstream business and appreciation of the Canadian currency with respect to the U.S. dollar.
Revenues for 2017 came in at $3,646 million, higher than $3,041 million recorded in the year-ago period.
Costs and Margins
Cost of sales during the reported quarter was $762 million compared to $597 million recorded in the year-earlier quarter. Adjusted gross profit margin in the reported quarter came in at 18.5%, flat year over year.
Selling, general and administrative expenses came in at $148 million, as against $128 million incurred in the year-earlier quarter.
Adjusted gross profit margin for 2017 was 18.6%, up 140 basis points year over year.
Balance Sheet and Cash Flow
Existing the fourth quarter, MRC Global had cash worth $48 million, down from $109 million recorded on Dec 31, 2016. Long-term debt at the end of the fourth quarter was $522 million compared to $406 million recorded at the end of 2016.
In 2017, MRC Global used $48 million cash from operations, as against $253 million cash generated in the comparable period last year. Capital expenditure during the fourth quarter was $30 million, down from $33 million recorded in the prior-year quarter.
During the reported quarter, MRC Global repurchased $50 million common stock at an average price of $15.57 per share, under its ongoing $100-million share repurchase program. The program is scheduled to close on Dec 31, 2018.
Outlook
MRC Global noted that sturdier upstream and midstream businesses as well as recovering energy market conditions will bolster its revenues in the upcoming quarters. Furthermore, lower tax rate, resulting from the tax reform, will likely give rise to cash flow and earnings benefits in 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. There has been one revision higher for the current quarter compared to three lower.
At this time, MRC has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MRC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is MRC Global (MRC) Up 2.3% Since Its Last Earnings Report?
A month has gone by since the last earnings report for MRC Global Inc. (MRC - Free Report) . Shares have added about 2.3% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is MRC due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Fourth-Quarter 2017 Highlights
MRC Global Inc. reported lower-than-expected results for fourth-quarter 2017.
Bottom-Line Performance
MRC Global reported an adjusted loss of 1 cent per share in the reported quarter, as against the Zacks Consensus Estimate of 3 cents per share. The company had recorded a loss of 18 cents per share in the year-ago quarter.
Adjusted earnings for 2017 came in at 27 cents per share, as against the adjusted loss of $1.10 per share recorded for full-year 2016.
Top-Line Performance
Sales in the reported quarter came in at $903 million, missing the Zacks Consensus Estimate of $912 million. However, quarterly revenues climbed 25.6% year over year. The upside primarily stemmed from improved North American midstream and upstream businesses.
Segmental Details
MRC Global’s fourth-quarter salesin the United States totaled $715 million, up 30% year over year. This upside was driven by increased midstream gathering and transmission, well completions and downstream project deliveries.
International sales came in at $117 million, up 3% year over year. The upswing was supported by increased upstream sector sales and favorable foreign currency-translation impact.
Revenues from Canada came in at $71 million, up 29% year over year. The year-over-year improvement was backed by solid upstream business and appreciation of the Canadian currency with respect to the U.S. dollar.
Revenues for 2017 came in at $3,646 million, higher than $3,041 million recorded in the year-ago period.
Costs and Margins
Cost of sales during the reported quarter was $762 million compared to $597 million recorded in the year-earlier quarter. Adjusted gross profit margin in the reported quarter came in at 18.5%, flat year over year.
Selling, general and administrative expenses came in at $148 million, as against $128 million incurred in the year-earlier quarter.
Adjusted gross profit margin for 2017 was 18.6%, up 140 basis points year over year.
Balance Sheet and Cash Flow
Existing the fourth quarter, MRC Global had cash worth $48 million, down from $109 million recorded on Dec 31, 2016. Long-term debt at the end of the fourth quarter was $522 million compared to $406 million recorded at the end of 2016.
In 2017, MRC Global used $48 million cash from operations, as against $253 million cash generated in the comparable period last year. Capital expenditure during the fourth quarter was $30 million, down from $33 million recorded in the prior-year quarter.
During the reported quarter, MRC Global repurchased $50 million common stock at an average price of $15.57 per share, under its ongoing $100-million share repurchase program. The program is scheduled to close on Dec 31, 2018.
Outlook
MRC Global noted that sturdier upstream and midstream businesses as well as recovering energy market conditions will bolster its revenues in the upcoming quarters. Furthermore, lower tax rate, resulting from the tax reform, will likely give rise to cash flow and earnings benefits in 2018.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimate. There has been one revision higher for the current quarter compared to three lower.
MRC Global Inc. Price and Consensus
MRC Global Inc. Price and Consensus | MRC Global Inc. Quote
VGM Scores
At this time, MRC has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile 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.
Based on our scores, the stock is equally suitable for growth and momentum investors while value investors may want to look elsewhere.
Outlook
Estimates have been broadly trending downward for the stock and the magnitude of these revisions indicates a downward shift. Notably, MRC has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.