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

Core Insights - MRC Global Inc. reported third-quarter 2024 adjusted earnings of 22 cents per share, exceeding the Zacks Consensus Estimate of 18 cents, but reflecting a 31.3% decline year over year [1] - Total revenues for the quarter were $797 million, matching the consensus estimate, but down 10.3% year over year due to reduced sales volumes in key sectors [1] Revenue Breakdown by Product Line - Revenues from carbon pipe, fittings, and flanges decreased by 27.4% year over year to $204 million [3] - Revenues from valves, automation, measurement, and instrumentation fell by 6.9% year over year to $285 million [3] - Gas product revenues increased by 1.6% year over year to $194 million [3] - Sales of general products declined by 14.3% to $60 million [3] - Sales of stainless steel and alloy pipe and fittings rose by 35% to $54 million [3] Revenue Breakdown by Sector - Revenues from Gas Utilities decreased by 6% year over year to $295 million [4] - Sales in the Downstream, Industrial and Energy Transition (DIET) sector increased by 11% to $248 million [4] - Revenues from the Production & Transmission Infrastructure (PTI) sector decreased by 14% year over year to $254 million [4] Revenue Breakdown by Segment - U.S. segment revenues, which represent 80.8% of total revenues, totaled $644 million, down 14% year over year [5] - Canadian segment revenues fell by 32% year over year to $26 million, primarily due to weakness in the PTI sector [5] - International segment revenues grew by 21% year over year to $127 million, driven by higher revenues from the PTI and DIET sectors [5] Margin Profile - MRC Global's cost of sales declined by 9.7% year over year to $637 million [6] - Adjusted gross profit decreased by 12.3% year over year to $166 million, with an adjusted gross margin of 20.8%, down from 21.3% in the previous year [6] - Selling, general, and administrative expenses decreased by 2.4% year over year to $123 million [6] - Adjusted EBITDA fell by 71.8% year over year to $48 million [6] Balance Sheet and Cash Flow - At the end of the third quarter, MRC had a cash balance of $62 million, down from $131 million at the end of December 2023 [7] - Total debt at the end of the quarter was $433 million [7] - In the first nine months of 2024, the company generated net cash of $197 million from operating activities, compared to $92 million in the same period last year [8] - Capital expenditures on property, plant, and equipment were $23 million, up 130% year over year [8] - Dividends paid on preferred stock remained flat year over year at $18 million [9]