MRC Global Inc. MRC reported fourth-quarter 2024 adjusted loss of eight cents per share against the Zacks Consensus Estimate of earnings of eight cents per share. In the year-ago-quarter, it reported earnings of 23 cents per share.

Total revenues of $664 million missed the consensus estimate of $695 million. The top line decreased 10.3% year over year due to the lower volume of sales in the Downstream, Industrial and Energy Transition (DIET) and Production & Transmission Infrastructure (PTI) sectors.

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MRC’s Revenues by Product Line

Based on MRC’s product line, revenues from carbon pipe, fittings and flanges were down 34.3% year over year to $145 million. Revenues from valves, automation, measurement and instrumentation were down 3.9% year over year to $248 million.
Gas product revenues increased 5.9% year over year to $180 million. Sales of general products fell 25.9% to $46 million. Sales of stainless steel, alloy pipe and fittings increased 55.2% to $45 million.

MRC’s Revenues by Sector

Based on the sectors served, revenues from Gas Utilities remained stable year over year at $253 million, while DIET sales were down 18.1% to $208 million. Sales from the PTI sector decreased 12.9% year over year to $203 million.

MRC Global’s Revenues by Segment

Sales generated from the U.S. segment (representing 81.6% of revenues) totaled $542 million, down 14.3% year over year. The downtick was due to reduced demand in the DIET and PTI sectors.

Sales from the International segment (18.4%) grew 14% year over year to $122 million, driven by higher revenues from the PTI and DIET sectors.

MRC’s Margin Profile

MRC Global’s cost of sales declined 10.5% year over year to $529 million. The adjusted gross profit was down 11% year over year to $146 million. The adjusted gross margin was 22% compared with 22.2% in the year-ago period.

Selling, general and administrative expenses were up 1.7% year over year to $123 million. Adjusted EBITDA decreased 34.7% year over year to $32 million.

MRC Global’s Balance Sheet and Cash Flow

Exiting fourth-quarter 2024, MRC had a cash balance of $63 million compared with $131 million at the end of December 2023. Long-term debt (including the current portion) was $387 million and net debt was $324 million at the end of the quarter.

In 2024, the company generated net cash of $268 million from operating activities compared with $177 million in the year-ago. Capital spent on purchasing property, plant and equipment was $28 million, up 100% on a year-over-year basis.

In the year, dividends paid on preferred stock were $23 million, down 4.2% year over year.

2025 Outlook

The company expects its 2025 revenues to increase in low to high-single digits year over year, driven by growth across its three business sectors. It expects to benefit from the recovery in its gas utilities business, higher U.S. natural gas infrastructure investment and its penetration into the chemicals, mining and data center markets.

MRC Global anticipates generating a minimum of $100 million in cash from operations and achieving a net debt leverage ratio of 1.5x by the year's end.

Other Developments

MRC also formed a joint venture with Frisbie Measurement Services, LLC (“FMS”) to establish IMTEC Services. IMTEC Services will specialize in providing integrated smart meter technical services to the gas utilities sector.

MRC’s Zacks Rank

The company currently carries a Zacks Rank #2 (Buy). 

Some other top-ranked companies from the same space are discussed below.

RBC Bearings Incorporated RBC currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

RBC delivered a trailing four-quarter average earnings surprise of 4.9%. In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2025 earnings has increased 1.2%.

Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%. The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 1.4% in the past 60 days.

The Middleby Corporation MIDD presently carries a Zacks Rank of 2. MIDD delivered a trailing four-quarter average earnings surprise of 1.9%.

In the past 60 days, the consensus estimate for MIDD’s 2025 earnings has inched up 0.8%.

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