MRC Global (MRC) Q3 Earnings Match Estimates, Revenues Miss
MRC Global Inc. MRC reported third-quarter 2023 adjusted earnings (excluding 1 cent from non-recurring items) of 32 cents per share, which matched the Zacks Consensus Estimate. The bottom line declined 23.8% year over year.
Total revenues of $888 million missed the consensus estimate of $934 million. The top line decreased 2% year over year due to lower volume in the Gas Utilities sector.
Revenues by Product Line
Based on MRC Global’s product line, revenues from carbon pipe, fittings and flanges decreased 3.8% year over year to $281 million. The same from valves, automation, measurement and instrumentation was up 5.5% from the year-ago quarter’s figure to $306 million.
Gas product revenues decreased 8.1% to $191 million. Sales for general products increased 9.4% to $70 million. The same for stainless steel, alloy pipe and fittings declined 24.5% to $40 million.
Revenues by Sector
Effective first-quarter 2023, MRC Global 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 13% year over year to $314 million, while the DIET sector sales increased 1% year over year to $279 million. Sales from the PTI sector increased 10% year over year to $295 million.
Revenues by Segment
Sales generated from the U.S. segment (representing 83.9% of third-quarter revenues) totaled $745 million, down 3% year over year. The results benefited from decreased demand in the Gas Utilities sector.
Revenues from the Canada segment (4% of the quarter’s revenues) increased 3% year over year to $38 million due to strong momentum in the DIET and PTI sectors.
Sales from the International segment (12.1% of the quarter’s revenues) surged 6% to $105 million due to higher revenues from the PTI sector, primarily in the Middle East and the U.K., followed by the DIET sector in the Netherlands.
MRC Global Inc. Price, Consensus and EPS Surprise
MRC Global Inc. price-consensus-eps-surprise-chart | MRC Global Inc. Quote
Margin Profile
In the quarter under review, MRC Global’s cost of sales decreased 4.6% year over year to $705 million. The adjusted gross profit in the quarter decreased 4.5% year over year to $189 million. The adjusted gross margin was 21.3% in the reported quarter compared with 21.9% in the year-ago period. Selling, general and administrative expenses were down 66.7% year over year to $126 million. Adjusted EBITDA decreased 14.6% year over year to $70 million.
Balance Sheet and Cash Flow
Exiting the third quarter, MRC Global had a cash balance of $52 million compared with $32 million at the end of December 2022. Long-term debt, net, was $300 million at the end of the third quarter compared with $337 million at the end of December 2022.
In the first nine months of 2023, MRC Global generated net cash of $92 million in operating activities against $30 million cash used in the year-ago period. Capital spent on purchasing property, plant and equipment was $10 million, up 25% from the year-ago reported number.
In the first nine months, MRC paid dividends of $18 million, flat year over year.
Zacks Rank & Stocks to Consider
MRC currently carries a Zacks Rank #4 (Sell). Some better-ranked companies from the Industrial Products sector are discussed below:
Graco Inc. GGG presently carries a Zacks Rank #2 (Buy). GGG’s earnings surprise in the last four quarters was 7.2%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, estimates for Graco’s 2023 earnings have increased 1.3%. The stock has gained 12.7% in the past year.
Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2 and a trailing four-quarter earnings surprise of 13.9%, on average.
AIT’s earnings estimates have increased 1.9% for fiscal 2024 (ending June 2024) in the past 60 days. Shares of Applied Industrial have risen 25.7% in the past year.
A. O. Smith Corporation AOS currently carries a Zacks Rank of 2. The company delivered a trailing four-quarter earnings surprise of approximately 14%, on average.
In the past 60 days, estimates for A. O. Smith’s earnings have increased 4.5% for 2023. The stock has soared 26.3% in the past year.
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MRC Global Inc. (MRC) : Free Stock Analysis Report
