MRC Global Inc. (NYSE:MRC) is scheduled to report Q3 earnings results after markets close for trading on October 28, 2020.
The company is expected to report earnings of -$0.17/share on revenue of $566.6 million. The consensus earnings per share (EPS) of -$0.17/share is based on a poll of 11 analysts and represents a decline in eps of −175.0% over the same quarter last year, when the company reported earnings of $0.23/share.
The revenue forecast of $566.6 million based on a poll of 12 analysts implies a year-over-year (YoY) decline in revenue of −39.8%. Last year the company reported $942 million in revenue for the quarter.
| Metric | Expected | Prior Year | YoY Change |
|---|---|---|---|
| Revenue | $566.64 | $942.00 | −39.8% |
| EPS | -$0.17 | $0.23 | −175.0% |
Earnings Call Trends
Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, missed 3 quarters, and met expectations 1 quarters.
What are your expectations from MRC Global Inc. for earnings this quarter? Let us know in the comments!
| Quarter | Expected | Reported | Surprise | Result |
|---|---|---|---|---|
| Q2, 2020 | -$0.23 | -$0.10 | 55.7% | Beat |
| Q1, 2020 | -$0.07 | $0.03 | 138.5% | Beat |
| Q4, 2019 | $0.07 | -$0.14 | −293.9% | Missed |
| Q3, 2019 | $0.13 | $0.23 | 70.9% | Beat |
| Q2, 2019 | $0.22 | $0.21 | −3.5% | Missed |
| Q1, 2019 | $0.07 | $0.14 | 90.9% | Beat |
| Q4, 2018 | $0.07 | $0.07 | 0% | Met |
| Q3, 2018 | $0.25 | $0.20 | −19.6% | Missed |
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price did not react much to the update.
| Report Date | Price Day Prior | Price Next Day | Change % | Result |
|---|---|---|---|---|
| July 28, 2020 | $6.29 | $6.31 | 0.3% | Increase |
| April 28, 2020 | $4.03 | $5.78 | 43.4% | Increase |
| February 13, 2020 | $11.40 | $10.46 | −8.2% | Decline |
| October 31, 2019 | $11.48 | $14 | 22.0% | Increase |
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −4.48, the model suggests that the company is not likely to be an earnings manipulator. A value of −4.48 implies a 0.0% chance of earnings manipulation.
Fundamentals And Technical Analysis
MRC Global Inc. is currently trading at $4.46/share, down −7.5% for the day. The company is trading at approximately 28.8% of its 52-week high of $15.47/share. The company’s stock price is down −29.3% since the last earnings report and down −8.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 41.08 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of −1.22 and a forward P/E multiple of −9.79.
MRC Global Inc.’s current share price also implies a price-to-book (P/B) multiple of 1.07. The following table summarizes some other key fundamental ratios:
| Metric | Value |
|---|---|
| Last Reported Fiscal Period Key | FY2020.Q2 |
| Period End Date | June 30, 2020 |
| Stock Price (Current) | $4.46 |
| P/E Ratio | −1.2x |
| P/E Ratio (Fwd) | −9.8x |
| PEG Ratio | 0.0 |
| Total Debt / Total Capital | 46.9% |
| Levered Free Cash Flow | $301 million |
| EV / EBITDA | 15.3x |
MRC Global Inc. is a small-cap stock with a market capitalization of $366 million and a total enterprise value of $1.366 billion. The company operates in the Industrials sector and the Trading Companies & Distributors industry.
MRC Global Inc., through its subsidiaries, distributes pipes, valves, fittings, and other infrastructure products and services to the energy industry in the United States, Canada, and internationally. The company supplies products across various markets, such as upstream, midstream, and downstream. It offers ball, butterfly, gate, globe, check, diaphragm, needle, and plug valves; and other products, such as lined corrosion resistant piping systems, control valves, valve automation products, top work components, and valve modification services, as well as measurement, steam, and instrumentation products. The company also provides carbon steel fittings and flanges comprising carbon weld fittings, flanges, and piping components; stainless steel, alloy, tubing, fittings, and flanges; and carbon line pipes. In addition, it offers natural gas distribution products, including risers, meters, polyethylene pipes and fittings, and various other components and industrial supplies; oilfield and industrial supplies and completion equipment, such as high density polyethylene pipes, fittings, and rods; and specialized production equipment comprising tanks and separators. Further, the company provides various services, such as product testing, manufacturer assessments, multiple daily deliveries, volume purchasing, inventory and zone store management and warehousing, technical support, training, just-in-time delivery, truck stocking, order consolidation, product tagging, and system interfaces; and various other services under the ValidTorque and FastTrack names. Its products are used in the construction, maintenance, repair, and overhaul of equipment used in extreme operating conditions, including high pressure, high/low temperature, and high corrosive and abrasive environments. The company was formerly known as McJunkin Red Man Holding Corporation and changed its name to MRC Global Inc. in January 2012. MRC Global Inc. was founded in 1921 and is headquartered in Houston, Texas.
